The Federal Government is set to consult industry on new laws that would mandate the acceptance of cash payments for certain businesses.

The consultation, mooted for release before the end of 2024, will seek to determine which businesses supplying essential goods and services should be covered by the mandate, and the potential impact of such a mandate, most notably on smaller businesses.

It will also consider the needs of individuals who rely on cash, including people in regional areas and those unable to use digital payments, and steps to ensure the “long‑term and sustainable distribution of cash”.

The cash use mandates would echo similar rules enacted in Spain, France, Norway and Denmark, as well as a number of US states.

Subject to the outcomes of the consultation, the mandate would commence from 1 January 2026, the Government confirmed.

Citing recent payments data, the Government around 1.5 million Australians use cash to make more than 80 per cent of their in‑person payments.

Still, up to 94 per cent of businesses accept cash, which was also recognised as a critical back‑up to digital payments during natural disasters or digital outages.

“We want to see cash acceptance continue particularly for essentials,” Treasurer Jim Chalmers and Financial Services Minister Stephen Jones said in a joint statement.

The Government has also laid out its plans to phase-out of cheque payments, promising a “long lead time” for customers and business to adjust to the new payments regime.

It notes that cheque use has declined by 90 per cent over the last ten years, with many banks and financial institutions ending cheque issuance for new customers.

As outlined in The Cheques Transition Plan, cheques will no longer be permitted to be issued after 29 June 2028, while cheque acceptance will cease on 30 September 2029.

“Banks,” the Ministers stressed, “have a responsibility to support cheque users as part of this smooth transition.”

AusPayNet has backed the Government’s cash mandate and cheque phase-out as necessary to its overall strategy of “modernising Australia’s payments system”.

“AusPayNet agrees with the Government that there will always be a role for cash in our society and we will be working with industry to ensure its continuity,” chief executive Andy White said.

The payments authority will lead an industry-wide transition coordination program, the Australian Payments Network transition, to work with financial institutions to prepare for the closure of the cheque system.

The Treasurer has written to the CEOs of the four major banks outlining the Government’s expectation that they participate in the Australian Payments Network transition coordination program and provide adequate support to all cheque-using customers to ensure their continued financial inclusion.

White said the payments authority will “work closely with financial institutions to ensure no one is left behind or excluded from the payment system as Australia phases out cheques.”

“Closing the cheque system is an important step in modernising Australia’s payment system, but cheque users should continue to be supported in the transition.