Retailers Left to Provide Cash Services Without Adequate Support, Senate Hears

Independent grocery, liquor, timber, and hardware retailers across Australia are now performing many functions once carried out by banks, Master Grocers Australia (MGA) told a Senate inquiry into the Cash Distribution Framework Bill.MGA CEO Martin Stirling said small retailers had stepped in to provide limited cash handling services in communities that may no longer have a bank branch, or a nearby post office, or any other alternative to accessing cash.He pointed out that more than 2,489 bank branches had closed across Australia between 2017 and June 2025, a reduction of more than 43 percent in the national branch network.Responsibility Shifted“As those branches have disappeared, the need for communities to access and use cash has not disappeared with them. Instead, much of that responsibility has shifted to supermarkets, post offices, and other local businesses,” Stirling told the Senate’s Economics Legislation Committee.For some small businesses, the CEO said the impact had been “profound.”“A supermarket may now be the only place where a customer obtains cash out, breaks a note, accesses change, or continues to transact when digital systems are not available. In some towns, the local retailer has effectively become part supermarket, part community service, and the last remaining point of access to the cash economy,” he said.“But the retailer didn’t choose to replace the bank branch, and it is not funded to perform that role.”Stirling noted that retailers’ role in providing such vital services often goes virtually unnoticed until a natural disaster strikes.“If we consider a regional community after a severe storm, where the local bank branch has closed years ago, and the nearest alternative may be an hour or more away, in that moment, cash ensures that commerce remains in that economy and remains functional. When digital systems fail, people turn to cash,” he said.“It may determine whether a family can continue to buy groceries and whether an older person can maintain their independence and whether a local business can continue trading.”MGA’s View on the BillThe bill would impose strict regulation on Armaguard, the near-monopoly provider of cash distribution, while giving the Reserve Bank of Australia (RBA) the power to step in and fund alternative providers if the company experienced service disruptions or became insolvent.Under the bill, Armaguard would first have to be designated by the ACCC before the new regulatory powers could apply.The ACCC had initially proposed requiring all businesses involved in cash distribution—including operators of cash access facilities—to register with a regulator and meet basic reporting requirements.However, that proposal was dropped following industry opposition, leaving the obligations to apply only to designated entities. Stirling said that distinction should remain.“The framework must preserve affordable access to cash distribution services for Australian businesses,” he said.According to Stirling, the government should actively monitor whether regulatory and system costs are being passed through to businesses and should be prepared to take appropriate action where those costs threaten continued access to cash.At the same time, Stirling stressed that ensuring cash distribution services remain available in regional and remote Australia must remain a priority.“We recognise that servicing remote communities can involve higher transport costs. However, a purely cost-to-serve approach risks making cash least affordable in the communities that depend upon them most,” he said.“Cash operates as a national network, and maintaining that network requires shared responsibility across the system.”Stirling’s view was supported by the CEO of the Customer-Owned Banking Association (COBA) Stephanie Elliott, who told the Commission that physical cash was still integral.“The global lesson is clear, in a digital-first society, cash remains an essential throwback,” she said.“It supports community resilience, continuity and preparedness when digital systems are disrupted.”After declining for many years, cash use in Australia appears to have stabilised, with the Reserve Bank reporting that cash accounted for around 15 percent of total transactions in 2025, up slightly from 13 percent in 2022.A petition launched in 2023 to retain both access to and the choice to use cash has gained over 200,000 signatures.