Do Australian businesses have to accept cash?


"Card, cash or cheque?" There was a time - a few decades ago, to be fair - when paying the bill with any of these three payment methods could have been the norm.

Of course, that is no longer the case. Cheques have almost gone the way of the dodo. On the other hand, debit and credit cards in either physical or virtual form have become the most prevalent payment method in Australia.

But what about cash? A glimpse at cash usage rates, which have steadily declined over the years, suggests that the heyday of notes and coins is also behind us.

do australian businesses have to accept cash

What that trend doesn't show is the desire that some Australians have for maintaining cash as a widely-accepted payment option though.

Take the Federal Member for Kennedy, Bob Katter.

Earlier this year Katter made headlines after being told that he wouldn't be able to pay for his lunch with a $50 note, as the Parliament House café he was dining at no longer accepted cash.

Katter stated at the time that businesses have to accept legal tender under law, describing the decision " not accept Australian legal tender, in the very place, that makes the laws to accept cash as a form of currency" as an embarrassing flaw.

He also argued that many Australians don't want, or can't afford, to see cash phased out, and pointed to power outages in the wake of recent natural disasters and sporadic failures to payment systems as examples of why cash should remain a viable option.

So do businesses actually have to accept cash as a form of payment, and what could the future hold for cash payments in Australia?

Cash on the decline

Before getting into either of those questions it's worth laying out how Australia's preference for using cash has changed over the years.

In 2007 when the Reserve Bank of Australia conducted its first Consumer Payments Survey, nearly 70% of all in-person payments were made using cash. By 2022, when the most recent survey was conducted, that figure had fallen to just 13%.

The decline had been relatively steady for many years, but it really sped up between 2019 and 2022 as a result of the pandemic.

"During the pandemic a lot of business only accepted cashless payments to curb the spread of the virus. This accelerated the transition because the practice ended up staying for a lot of business and becoming a habit for consumers," explains Dr Angel Zhong, an associate professor of finance at RMIT University.

"The other reason that's driven this is the variety of cashless payment choices we have and innovations in technology in the payment space.

"We now have a variety of choices starting with PayID, Apple Pay and Google Pay, and let's not forget that Australia is actually the birthplace of large scale buy now, pay later products which have an important place in the cashless payment space."

While most in-person payments were made with cash a little over a decade ago, just one in 20 survey participants used cash for all of their transactions in 2022. In 2019 it was one in ten.

Interestingly, the Reserve Bank also found that the decline in cash use has occurred across demographic groups. It's not only younger and metropolitan Australians who are giving up cash as a form of payment, but older and regional Australians as well.

Is it legal for a business to refuse cash?

As cash use has declined and card payments have become the go-to for many at the checkout, plenty of businesses have also made the decision to go cashless.

It's not just café's that have moved away from taking cash either. Some of the country's largest sporting venues, like the Melbourne Cricket Ground, Stadium Australia and the Sydney Football Stadium, for example, are now all cashless.

nandos no longer accepting cash
Nandos is now card only. Photo: Reddit.

This is perfectly legal according to the Australian Competition and Consumer Commission (ACCC). Businesses can choose which payments they want to accept, whether that's only cash, only card, or a mix of payments.

In the same way that card surcharges need to be displayed prominently though, businesses also need to make the available payment options clear.

"It is legal for a business to specify the terms and conditions that they will supply goods and services," the ACCC states on its website.

"This includes whether they will accept cash payment. However, consumers must be made aware of these terms and conditions before they make a purchase."

But why are businesses allowed to refuse cash if it's legal tender? As the Reserve Bank explains, notes and coins don't have to be permitted as a form of payment even though both are classified as legal tender.

"Although transactions are to be in Australian currency unless otherwise agreed or specified, and Australian currency has legal tender status, Australian banknotes and coins do not necessarily have to be used in transactions and refusal to accept payment in legal tender banknotes and coins is not unlawful."

Could Australia become cashless?

With cash payments on a downward trajectory and some businesses phasing out cash as a payment option, could there be a point in the future where cash use goes the way of cheques?

"If we look at look the growth trajectory it's very likely that by 2030 more than 95% of payments will be cashless," says Zhong. "So my prediction is that by 2030 Australia will be a functionally cashless society."

rba cash payments

As Zhong explains though, there's an important distinction between a cashless society and one that is 'functionally cashless'.

"When we say functionally cashless it means that the dominant type of payments are cashless payments. So people will still be able to use cash and it will still be legal tender, it's just that most people won't be using it."

While cashless payments are likely to become even more of the norm in years to come, Zhong agrees that cash has, and will continue to have, an important place.

Part of the reason for that is that cash continues to be a critical payment method for many, especially among groups without high levels of digital literacy. Another factor is that some Australians simply lack access to the kind of stable internet needed to make cashless payments reliable.

"This is why the transition won't happen overnight. It will happen gradually and there will be pain points which I hope the government and community groups can work to address," Zhong says.

"For example, in helping older generations to embrace technology by improving digital literacy, and also to build better infrastructure to support this innovation in technology.

"We need to balance the need for efficiency with the need to ensure that essential services remain accessible to all Australians."

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Tom Watson is a senior journalist at Money magazine, and one of the hosts of the Friends With Money podcast. He's previously worked as a journalist covering everything from property and consumer banking to financial technology. Tom has a Bachelor of Communication (Journalism) from the University of Technology, Sydney.
Shaton Sherry
May 4, 2024 8.12am

So if card is the only way a business chooses to take payment, leaving consumers with no choice, why should the consumer pay a cc fee as well?

We can currently avoid fees when we choose to use cash. If a business wants cc only payment it should pay the fees and not pass to the consumer.

Peter OBrien
May 5, 2024 4.33pm

It's also breaking a contract when cc charges added to the bill. A price that is listed on a menu is "An invitation to treat"when you order a dish, you enter a contract for that goods and price. "IF" cc surcharges are not mentioned you have the right to only pay the menu price. And tell them to Shove the surcharge.

ray jenkins
May 4, 2024 10.40am

why is everybody talking about a cashless society buy nobody is commenting on the never ending bank charges at shops just for spending your own money on food. the banks are ripping us off

Glen Foran
May 4, 2024 10.42am

The biggest problem with going cashless is how do you pay for things for your debit card, credit card, or phone goes missing, becomes broken or doesn't work for what ever reason. Most people only have one of these and they can take days or weeks to replace, especially if you are overseas. Also, the internet and the cashless society has been pushed on us in a non- democratic non-voting way and the internet is becoming less and less secure everyday. I don't know why we are being forced to be digital. At least the government or the banks should give us all free up-to-date mobile phones with the latest worthwhile apps and connection plans. It is like the homeless crisis. What effect does not having a residential or postal address have on the homeless.

May 4, 2024 10.42am

The problem is every "expert" on this matter keeps getting the information WRONG. Let's be very VERY clear about this. It has NOTHING to do with whether a business is permitted to accept cash or not.

Here's the important part: A customer CAN pay for their goods and services using CASH if they choose to at their discretion. It has NOTHING to do with a business allowing it or not allowing it.

The best advice to give all of us as customers is this - ensure you always carry sufficient quantity of each denomination. Therefore you can "pay" the correct amount without requiring change.

If the person on the other side of the counter in some way balks at the cash - you leave it on their counter AND THEN LEAVE ! You are deemed to have paid for the goods / services.

Better yet - and if the employee threatens to call the police or some such rubbish - encourage them to do exactly that and ask them for the call to be put on speaker phone while you all listen to the police laugh at them at best or chew them out for attempting to waste police time at worst.

Again - this topic is NOT whether the business wants to choose to accept cash or not - its OUR choice as consumers to elect to do so and if we do - there is NOTHING that business can do about it.

As consumers we have to STOP asking permission of businesses upon such topics. The customer is always right. Businesses WILL learn to appreciate customers once again or they'll be put out of business.

Don barnes
May 7, 2024 1.14pm

Dead right..people need to assert their rights

Sally Bembrick
May 4, 2024 12.44pm

Cashless would not worry me if businesses (not all) did not add on a surcharge for using a cash card. I have contacted a bank and a credit union re this practice and I have been advised that this is not a charge that the banks implement.

Apparently the businesses (not all) charge a surcharge to cover the purchase cost of their 'card reader'. At what point do they start to actually make money from using these machines?

I can go to the Capital Cities and buy a coffee with my cash card and not be charged a surcharge. I travelled around Europe and was not charged for using my cash card.

I believe that charging extra to use your own cash is 'price gouging' at its best.

May 5, 2024 6.00pm

I think the business pays the bank, per use/term for the use of the reader, not its purchase. Most businesses just up the price for all products to cover it, as a hidden cost, rather than advertise the fact. We have 2 readers at my work. One is more $$ than the other, to the business, so is only used for phone payments etc. The simpler one is cheaper, and scans cards on site only.

Our price doesnt change, whether the customer pays cash, or either reader card

Octavian Dixon Ritchie
May 4, 2024 6.31pm

After reading the comments, this is my opinion. Accepting cash is extra work for the business. So by you paying cashless, you are in retrospect saving the business labor costs, theft risk, and opportunity/convenience. Unfortunately, all cashless payments go through a merchant. Different goods and services are categorised by merchants as different levels of risk and merchants charge a percentage of all transactions for their services. When you buy something online you can't pay cash unless the vendor accepts direct debit. I own a shop and have a severe physical disability. I literally cannot physically handle cash. So I only take cashless payments. I however absorb merchant fees for now. To answer the losing your phone scenario. The only way forward I can see is microchips.

Chris Finger
May 4, 2024 7.45pm

It's ludicrous to go cashless in Australia. Too many outback communities with dodgy internet and also natural disasters which cause places to lose internet coverage. Cash is necessary. Garage sales, pocket money, second hand purchases which encourage recycling, donation tins etc as well. Also I value my privacy! Cash is King.

Nicole O
May 7, 2024 10.17am

Exactly right! Not to mention people in domestic violence situations whose partners track their banking. Or a grandparent putting some money into a birthday card.. Or just the most important fact of PRIVACY; so the banks and government cannot track our every move and cut us off if they dont like what we post about on social media! It's absolutely a must in a free society.

G Williams
May 5, 2024 8.45am

If only card is accepted then no surcharge should be permitted and this be law by payment by card saves the company more than it costs them ie no counting cash, no cash pick, no going to deposit cash, balance of income/paymets for day already done, increased security as no cash or little cash on site reduced chance of robbery payments over phone or net have no person to take payment these all are costs that are taken from business so surcharge not justified and goverment bodies are the front runners at surcharges

Marianne MacDonald
May 5, 2024 10.23am

Until they sort out the ongoing fees that both the banks and the businesses charge and not to mention the ongoing security issues, data leaks and scammers, I won't be a part of that transition. Living in regional Queensland where you are flat out having a fone signal, never mind the hour and a half spare in your day to spend on hold waiting to talk to someone about your bank account because they've decided to close all the branches down . . . stating we can just drive to our nearest branch that's only 2 hours drive up the road. Banks need to upgrade their own security, a bit like the UK at the very least, so that the name on the account matches the details, bsb etc, so that these scammers and hackers are traceable and unable to get away with stealing money.

I like to buy and sell a few bits and bobs on marketplace and gumtree and don't want to be sending everything through the bank.

We are soooo far away from being Cashless from where I stand, sorry.

Greg Stephenson
May 5, 2024 6.19pm

In my opinion the customer always has the option to vote with their feet and walk away from any shop that refuses to accept cash.

Theresa Smith
May 5, 2024 10.45pm

I object to the additional charges that the business impose when making card payments-which generally aren't advised to the customer prior to conducting business. If your business will not accept cash as payment, then there should be no additional charge for using cards. There is also the issue of making small cash donations to various charities-that form of fund raising is now obsolete.

Lou hunter
May 5, 2024 11.10pm

Most people pay bills online and spend their cash to pay for most of there daily needs. And cash is the back bone of small country towns. I'm so happy to see so many travellers using cash instead of cards. Cash is 🤴

Brad McDonell
May 6, 2024 11.40pm

to use the tap and go system not only incurs a percentage charge or surcharge /penalty for the priviledge of use , it also allows for rounding up , possibly this nasty plan has been secreted for many years with the reduction / removal of one and two cent coins and or possibly the plan goes back to the pounds shillings and pence removal in 1966 in order to introduce dollars and cents and eventually the introduction of the magic plastic making people think that the change was something wonderous , money in a tap , this would have to be the greatest misjustice that Australia was to trust the powers to be only to find that the country has been duped , shame on all politicians , the true white criminals of our country

Scott Anderson
May 7, 2024 12.40pm

We don't necessarily have to remove cash to make transactions easier.

The cost of having a lot of change on hand is the issue for business.

If the Govt removed the $100 & $50 notes then businesses only need to have smaller amounts of change.

You can still grab $100 from ATM but it'll be 5 X $20 notes. A lot easier to deal with.