Small businesses with turnover under 10 million dollars won’t need to comply with new cash mandate regulations, according to Treasury’s exposure draft.
What’s happening: From 1 January 2026, fuel stations and grocery retailers must accept cash payments for in-person transactions under 500 dollars under draft regulations released by the Federal Government.
Why this matters: Around 1.5 million Australians use cash for more than 80 per cent of their in-person payments, according to government data.
Fuel stations and grocery retailers will be required to accept cash payments from 1 January 2026 under draft regulations designed to ensure Australians can still purchase essential goods when digital payment systems fail.
The Federal Government released exposure draft regulations in October that mandate cash acceptance for in-person transactions under 500 dollars at fuel and grocery retailers, with appropriate exemptions for small businesses.
The government has positioned the regulations as necessary to help ensure Australians who rely on cash won’t be left behind as many businesses move to cashless payment systems. Assistant Treasurer Daniel Mulino acknowledged that while Australians are increasingly using digital payment methods, cash will maintain an ongoing place in society under the Albanese Government.
The mandate applies to fuel and grocery retailers, including both major supermarket chains and independent operators, but only for in-person transactions under 500 dollars. This means businesses won’t be required to accept cash for large purchases like bulk supplies or equipment.
Businesses with aggregate turnover below 10 million dollars will be exempt from the requirement. If a business is part of a franchise arrangement, the exemption applies if the franchise arrangement’s turnover is under 10 million dollars.
Treasurer Jim Chalmers framed the mandate as focusing on the needs of those who rely on cash, while recognising the challenges for small businesses. The government has stressed that for many Australians, cash represents more than a payment method.
According to government data, around 1.5 million Australians used cash to make more than 80 per cent of their in-person payments, and up to 94 per cent of businesses continued to accept cash at the time the consultation paper was released.
COTA Australia Chief Executive Officer Patricia Sparrow described the mandate as crucial reform for older Australians, with one in two Australians over 65 years and about 35 per cent of those aged 50 to 65 reporting they use cash regularly. The organisation has emphasised that for many older Australians, cash represents a cornerstone of financial independence, not just a payment tool.
COTA pointed to multiple valid reasons why people need to and prefer to pay with cash, including privacy and security concerns. The organisation noted that as it has become harder to pay with cash over the years, too many people have been left with no option to pay for goods without facing additional charges or intrusive security questions.
The regulations also aim to address resilience concerns during emergencies. Research referenced in the consultation paper shows that while electronic retail payment services are widely available, outages can be highly consequential for people, particularly during natural disasters when power and internet connectivity may be disrupted.
The mandate will be reviewed after three years to ensure it is functioning as intended. The review will consider whether the mandate should be expanded, its impact on businesses, and any developments in cash distribution and access.
For larger retailers caught by the new rules, the change will mean reintroducing cash handling processes that many have phased out in recent years. This may include re-establishing cash floats and tills, staff training to handle and verify cash, and more frequent bank deposits and reconciliation procedures.
The shift comes as digital payment adoption has accelerated dramatically. Recent research shows that 73 per cent of Australians do 80 per cent or more of their spending digitally, with over half using cash for less than 10 per cent of their total transactions.
However, concerns remain about the implications of a completely cashless society. Heritage Bank CEO John Thomas wrote earlier this year that cash remains crucial in times of crisis, pointing to the devastating floods of 2022 in Lismore where digital systems faltered and cash became the lifeline that kept commerce alive.
The draft regulations were informed by public consultation earlier in 2025, with submissions closing on 31 October. The government invited stakeholder views on key aspects of the cash mandate to ensure it is fit for purpose.
Under the proposal, the mandate focuses on essential goods and services, defined as those purchased to meet basic needs, maintain day to day living arrangements, or fulfil legal obligations.
Bill payment services at Australia Post are also included in the regulations from 1 January 2026, covering both bill payment and cash access services like Bank@Post, including all Community Postal Agents.
For small businesses that fall under the 10 million dollar exemption, the key step will be to document turnover clearly to demonstrate the exemption applies. Businesses exempt from the requirement may still choose to accept cash to attract customers who prefer physical currency, particularly in regional areas where cash use remains stronger.
The mandate represents part of a broader government strategy to balance innovation in payments with accessibility for all Australians, ensuring cash remains a viable option while the country continues its digital transformation.
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