The Australian government plans to introduce a mandate requiring businesses to accept cash for essential items. This initiative aims to support those who rely on money and ensure the resilience of the payment system.

I don't know what an essential item is. I doubt anyone knows.

Many of my clients have given up on cash, but many more are committed to it.

Key Points of the Proposal

• Businesses selling essential items must accept cash payments
• Appropriate exemptions for small businesses The consultation period is open until 14 February 2025
• Proposed implementation date: 1 January 2026

Implications for Australian Retailers

While these policy objectives aim to protect consumers, they may present specific operational challenges for you.

Current Cash Usage Statistics

• 13% of transactions in Australia were made using cash in 2022
• 1.5 million Australians use cash for over 80% of in-person payments
• Up to 94% of businesses currently accept cash

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The Treasury seeks feedback from businesses like yours to shape the final policy.

If you want to supply feedback, here's how you can contribute:

1. Review the consultation paper on the Treasury website here

2. Submit your response by 14 February 2025

3. Share your unique perspective

International Context

Similar cash mandates have been implemented in countries like Spain, France, Norway, Denmark, and some US states.

Stay Informed and Prepared

The retail landscape in Australia is evolving, and staying ahead of regulatory changes is crucial for your business success. This cash mandate could significantly impact your daily operations, from technology investments to staff management.

Today, not offering various payment alternatives will cost you. People want it. Yesterday, I went to buy bread partly to remove some change in my wallet; I went not to my regular bakery but to a bakery that I know accepts cash.

The Power of Flexible Payments

Catering to Customer Preferences

Our POS software features fully customisable payment methods.

Choose from cash, card, mobile payments, or bank deposits—whatever suits your customers' preferences.

This flexibility enhances customer satisfaction and keeps you competitive in Australia's evolving retail landscape.

Streamlining Transactions

An integrated POS system allows you to process payments faster and more accurately than traditional methods. This efficiency translates to shorter queues and happier customers.

Advanced Payment Handling

Split Payments and Deposits

Our POS solution goes beyond basic transactions. It allows for sophisticated payment scenarios that cater to various business models.

For instance, a customer ordering custom furniture can make a 50% advance payment, with the balance due upon delivery. This feature is handy for businesses dealing with high-value items or custom orders.

Customising Your Payment Rules

Tailor your POS system to match your unique business needs. Set minimum purchase amounts for card payments or configure automatic surcharges for specific payment methods.

Navigating Payment Method Restrictions

While customising your payment options, it's crucial to understand the legal framework governing payment methods in Australia. Unless you have a sign that you do not accept cash, you need a good excuse to reject it, e.g. you do not have enough change.

The Future of Retail Payments

Contactless and Mobile Payments

COVID skyrocketed contactless payments. Most card payments now are contactless. Now, the convenience of tapping a card or device to pay speeds up the checkout process and enhances customer satisfaction by minimizing physical contact.

Security Benefits

What I like about contactless payments is their enhanced security features. Contactless technology provides a safer transaction environment by reducing the risk of card skimming and card security as you do not handle the card.

Mobile Wallet Usage

Mobile wallet usage is rapidly rising. These digital wallets give ease of use and enhanced security through biometric authentication, such as fingerprint or facial recognition. For example, I like that my fingerprint protects my card usage.

Choosing the Right POS System

When selecting a POS system for your retail business, consider these key factors:

• Integration capabilities with your existing systems
• Scalability to grow with your business
• User-friendly interface for quick staff training
• Robust reporting features for business insights
• Regular updates and excellent customer support

The Impact on Your Bottom Line

Implementing comprehensive payments will have a significant impact on your business:

• Reduce transaction times
• Increase average transaction value; studies show people spend more on electronic money.
• Boost customer satisfaction scores with faster, more flexible payments in the form they like.

Ready to revolutionise your payment process? 

Frequently Asked Questions (FAQ)

Q: How do contactless payments work?

A: Contactless payments use Near Field Communication (NFC) technology. This method is fast, secure, and reduces physical contact, making it a preferred option for many consumers.

Q: What are the benefits of using mobile wallets?

A: Mobile wallets offer several benefits, including convenience, speed, and enhanced security with biometric authentication. 

Q: Are contactless payments secure?

A: Contactless payments are generally secure, I think more so than physical cards.

Q: What should I consider when choosing a POS system for my retail business?

A: When selecting a POS system, consider integration capabilities with existing systems, scalability to accommodate business growth, user-friendly interfaces for easy staff training, robust reporting features for business insights, and reliable customer support.

Q: How do POS systems handle split payments or deposits?

A: Our advanced POS systems allow businesses to manage complex payment scenarios such as split payments or deposits. This feature is handy for restaurants where customers often prefer split bills.

Q: Is tap-to-pay safe from skimmers?

A: Tap-to-pay transactions are generally safe from skimmers because they use encrypted data transmission and do not rely on the magnetic stripe that skimmers typically exploit. Mobile payment goes one stage further by adding an extra layer of security. 

Picture this: A pensioner goes shopping; in her wallet are a few notes ready to use for shopping. Soon, most vendors will wave her towards card readers instead. "Just tap and go." They say, "It's faster!" Could this be our future?

Don't Panic, Cash Isn't Disappearing Overnight

According to some estimates, by 2030, Australia will be a cashless society. While this shift won't happen overnight, it will significantly affect businesses like yours.

Why the Cashless Craze for retailers?

• Faster: Tap-and-go payments are quick and easy. Our POS System can do such transactions faster than cash, I know, as we have measured it.
• Cost: Retailers save on handling, counting, and securing physical cash.
• Security: For retailers, handling electronic money is much more secure and more challenging to steal—lower risks of counterfeiting and internal theft for retailers when using electronic payments.
• Fewer banks and ATMs: Cash can be a problem as we have fewer banks and ATMs.

Hold On, Not So Fast – Retailers Are Concerned

Recent studies paint a complex picture.

• Few cashless support: A whopping 71% of Australians are worried about going cashless, and many retailers are among that 71%.
• More payment types: Few retailers want to lose customers, so if a customer wants to pay in cash, most retailers will accept it.
• Hidden Fees: Every fee counts, and a cashless society costs retailers.

The Real Risks of Going Cashless

It's not just nostalgia. Here's why all business owners should care:

• Leaving Folks Behind: The elderly, those with disabilities, undocumented workers, and even domestic abuse victims may rely heavily on cash. Going cashless can exclude them.
• Your Data, Their Data: Card companies and banks see every transaction, raising privacy concerns. Large companies now buy this information from banks, providing incredible information on what people buy from their cashless purchases.  
• Outages Happen, and Australia's electronic network is not ready: When the power or network goes down, currently, only cash keeps things moving.

So, What's a Business to do?

First, check what percentage of your sales are cashless versus cash via your POS reporting. The "End of Day" report will show a "Sales Payment Breakup" - run this for the past year to understand your current cash/cashless mix.

With this data in hand, you can plan appropriately:

Go to the main menu and select "End of day."

Click where it has a green arrow.

The part of the report you are looking for is the Sales Payment Breakup below.

Pick an appropriate period, generally the last year. Run it a few times with slightly different dates, as you may get a better value with various dates. 

This will supply you with the information you need.

Conclusion

1. Keep SOME Cash Handy: It's an emergency lifeline and a way to serve everyone.
2. Speak Up! Let your local council and politicians know a fully cashless Australia has drawbacks.

Australia's transition away from cash is complex. With proper planning and an inclusive "fair go" approach, small businesses can thrive by straddling both cashless and cash payments during this shift.