Yahoo Finance Cashless Australia: KFC dumps cash - but is it legal?
Can Australian businesses decide not to accept cash? There can be surprising reasons why.
The decision for KFC stores in Australia to turn completely cashless doesn’t break any rules as long as the business is “clear and upfront” about what type of payments they accept.
Several KFC stores in New South Wales are no longer accepting cash payments, with signs posted in shop front windows stating: “This restaurant is cashless. We accept card only.”
The move has sparked debate about the legality of a business choosing not to accept cash.
Also read: Cashless Australia: What you need to know
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Some argue cash is legal tender and must be accepted, but according to the Australian Competition and Consumer Commission (ACCC) that’s not the case.
“Businesses can choose which payment types they accept. It is legal for a business not to accept cash,” the ACCC website states.
“However, businesses should be clear and upfront about the types of payments they accept, and the total minimum price payable for their goods and services.”
This is also the practice that would’ve been employed on the flip side of the coin, when businesses chose not to accept card payments and put up signs saying “cash only”.
KFC told Yahoo Finance only a small number of KFC restaurants are going cashless.
“This is at the discretion of our franchise partners and is in line with legal requirements. All cashless KFC restaurants display signage explaining what payment methods are accepted," the spokesperson said.
Why are Aussie businesses going cashless?
There’s no dispute handling cash costs money.
The chief executive of Commonwealth Bank Australia (CBA) Matt Comyn last week said the “support distribution and availability of cash costs approximately $400 million each year”.
While on a smaller scale, Richard Holden, Professor of Economics at UNSW Business School, told Yahoo Finance using cash from a “system perspective is costly and a hassle”.
“If you run a cafe, cash handling is a giant pain,” Holden said.
“You’ve got to have insurance, you've got to bundle it up at the end of the day and take it to a night safe. It takes staff time and it costs money.”
However, some other businesses have decided to take cash out of the equation for a completely different reason; to promote staff safety.
Dealing with cash and the physical or emotional consequences when businesses become the target of a robbery appears to be another motivator for the decision to remove temptation.
Annee's Caphê Sua Da in North Queensland was broken into and owner Annee Nguyen made the call to make sure her “shaken up” staff felt safer at work.
Other crime-plagued small businesses in across Australia have discussed making a similar move.
Do Aussies support going cashless?
There are arguments to both sides about a cashless Australia.
Trends are showing Australians withdrawing and using cash for point of sale transactions is dropping, but there are many reasons people should still have the option to.
Vulnerable Aussies like the old, socioeconomically disadvantaged, or those living in rural areas are more likely to use cash and be disproportionately impacted if it was taken away.
A poll of Yahoo Finance audience members found 92 per cent of respondents would not support Australia going completely cashless.
There are still cash points available at most supermarkets and the some 20,000 ATMs around Australia, with about $100 billion in cash - or two billion notes floating around.
Experts say Australia is more likely to become “functionally cashless” as less people decide to use it, which means increasing costs to support a smaller segment of the community.
Businesses deciding to no longer take on those costs could accelerate the process, or government intervention.
“You could accelerate the process if the government said: ‘We are going to phase out the $100 bill by 2024, then the $50 note by 2025 and the $20 by 2026’,” Holden said.
“By giving a timeframe for the transition, people would have time to prepare.”
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