Reserve Bank chief issues dire warning about the future of cash – and reveals what will be happening next to the $5 banknote
- Reserve Bank chief Michele Bullock has issued a cash warning
The head of the Reserve Bank of Australia has warned that the future of cash is in jeopardy because banknotes are expensive to distribute.
Michele Bullock gave a grim picture of the cash distribution during her first appearance before a parliamentary committee as RBA governor.
“As the use of cash for transactions has declined, the economics of cash distribution have come under pressure,” she said on Friday.
‘This was one of the key factors behind the merger of the two largest cash transport providers last year.’
Michele Bullock gave a grim picture of the cash distribution in her first appearance before a parliamentary committee as RBA governor
Armaguard and Prosegur Australia received regulatory approval to merge last year, giving the new company Linfox Armaguard a 90 percent share of Australia’s cash-in-transit market.
This was based on a promise to the Australian Competition and Consumer Commission that it would continue to provide cash until 2026.
“Linfox Armaguard has since indicated that its cash distribution activities nevertheless remain unsustainable,” Ms Bullock said.
“The RBA places a high priority on ensuring the Australian community has good access to cash withdrawals and deposits.”
Before the merger, Armaguard had distribution deals with Commonwealth Bank, ANZ and NAB, while Prosegur, a Spanish company, had a deal with Westpac.
Ms Bullock said she would continue to meet with leaders in the cash distribution industry.
“These discussions will likely continue for several months,” she said.
‘Developing a money distribution model that is sustainable in the long term will require addressing a number of very complex issues, and this will take some time to work out.
“So I have encouraged key participants in the cash distribution system to approach these issues with a public interest in mind rather than just their own narrow business interests.”
Ms Bullock also revealed that the RBA, which owns polymer banknote manufacturer Note Printing Australia, would consult with Indigenous groups on the design of the new $5 note after the Queen’s death in 2022.
Armaguard and Prosegur Australia received regulatory approval to merge last year, giving the new company Linfox Armaguard a 90 percent share of Australia’s cash-in-transit market
During the last financial year, 718 ATMs were removed, according to data from the Australian Prudential Regulation Authority.
This happened when 424 bank branches were closed in the year to June.
The number of branches has fallen by more than a third, or 37 percent, since June 2017, but in six years the number of ATMs has plummeted by 59 percent.
Australia still has 5,693 ATMs – less than half the level of 13,814 in June 2017.
The number of bank branches has fallen from 5,694 to 3,588.