As digital payments become increasingly popular, Australia is taking a bold step to ensure cash doesn’t disappear from everyday life. Starting January 1, 2026, businesses will be legally required to accept cash for purchases under $500. This mandate aims to protect consumer rights and ensure that everyone, regardless of access to digital banking, can still pay with cash for essential goods.
A Bold Step for Cash Payments
The new legislation, announced by Treasurer Jim Chalmers, will primarily affect grocery stores and fuel retailers, which must accept cash payments from 7 AM to 9 PM. “We want to make sure that people can use cash for essentials when they want to and when they need to,” Chalmers explained. While this law will apply to most retailers, small businesses with annual revenues under $10 million will be exempted. However, larger retailers that share a trademark with smaller ones will still have to comply.
The Decline of Cash and Its Impact
This move comes in response to the steady decline in cash usage over the past decade. In 2007, cash made up about 70% of all payments in Australia, but by 2022, this number had dropped to just 13%. Despite this sharp decline, around 1.5 million Australians still rely on cash for a significant portion of their in-person purchases. This group, while smaller, highlights a segment of the population that is still deeply dependent on physical money, whether due to preference, necessity, or lack of access to digital payment systems.
Guaranteeing Access to Essentials for All
The government is also keen to ensure this change does not disproportionately affect any particular group. Acknowledging the shift toward digital payments, the cash mandate aims to guarantee equal access to essential goods. Cash payments will now be guaranteed for purchases at fuel stations and supermarkets, ensuring no one is left behind simply because they prefer, or need, to use cash. The law will apply to purchases up to $500, which includes most everyday essentials like groceries and fuel.
For smaller businesses, the law will be less stringent. They are still allowed to refuse cash if their annual turnover is under $10 million, though businesses that share a trademark with larger companies will still be bound by the new rules. This is a nod to the concerns that requiring cash payments for every transaction could disproportionately burden small, local shops, explains Sky News.
Addressing Price Gouging and Consumer Rights
Additionally, the government has indicated that this move is part of broader efforts to crack down on price gouging in large supermarkets. Under the new regulations, major retailers will no longer be able to charge excessive prices, particularly where there is a significant difference between supply costs and sale prices. This measure aims to ensure consumers are not taken advantage of, especially as the cost of living continues to rise.
While the cash mandate has received some pushback from those who see it as a step backward in the digital age, it is also a reminder of the importance of maintaining multiple payment methods in a rapidly changing world. The regulation will be reviewed in three years to assess its effectiveness and make adjustments if necessary.
