In December 2025, the Federal Government announced the mandatory cash acceptance policy requiring specific industries and businesses to continue accepting cash transactions.
What are the new changes?
The new law requires cash transactions to be accepted under these conditions:
- In effect, 1 January 2026.
- Law requires certain retailers to accept cash transactions of $500 or less during operating hours from 7:00 am to 9:00 pm.
- Affected industries include grocers and fuel retailers.
- Businesses with a turnover under $10 million are exempt.
Why is this law going through?
According to the government, the law is intended to support Australians who rely on the cash economy. This ranges from low-income earners to communities that depend on cash. Even though the digital economy is strong, cash remains in use, accounting for approximately 20% of all transactions in Australia.
There is an appetite for consumers to use cash; one reason is card surcharges. Roughly $100 billion in cashless transactions occur each month, and banks charge a 2.5% transaction fee. This amounts to $2.5 billion in costs borne by consumers and businesses. These fees add up, creating a budget gap or cash-flow issues.
The mandate allows consumers to choose alternative payment methods, supporting consumer rights.
How can businesses prepare for the mandatory cash acceptance law?
Businesses that trade in fuel and grocery retail will need a cash policy in place to comply with the law. This means youโll need:
- A cash register system.
- Adequate cash float for day-to-day operations (giving change, petty cash, expenses).
- Staff trained on handling cash.
If your business turnover is less than $10 million, you are exempt from following this policy.
Cash vs Cashless
Cash is commonly used in regional areas and offers an alternative payment method for businesses. Part of the appeal is that it eliminates bank fees on transactions. Depending on where you operate, this may be a significant draw for your business. It also provides resilience for your operations, as cash isnโt affected by blackouts or system downtime.
In comparison, a cashless approach can be more efficient as it is quick, convenient, and doesnโt require additional staff training. If you’re using accounting software, cashless payment systems generally reconcile payments immediately, reducing admin.
Small businesses and the mandatory cash acceptance law
For businesses in fuel and grocery retail, you must comply with the changes unless your turnover is less than $10 million. For businesses that arenโt affected, the change does present an opportunity to evaluate how you charge your customers.
Remember, a good rule of thumb is to make it easy to pay you. Cash for invoices might not make sense, but cash in the retail or service industry still does. If you do use cash in your business, make sure that you and your staff are prepared to handle cash transactions.
