Yahoo Finance Coles reducing how much cash you can withdraw
Coles has reduced cash withdrawals to $200, down from $400.
Supermarket giant Coles has halved its cash withdrawal limit, as the country’s main cash transport company teeters on the brink of collapse.
Coles has confirmed a decision to reduce cash withdrawals in stores nationwide to $200, down from $400, which it says brings it in line with other major retailers.
The supermarket has now resumed cash collections and deliveries from Armaguard, after alerting staff to a temporary pause earlier this week. The supermarket had warned staff they may need to convert to “card only sales” if cash reserves got too low over the coming week.
Rival Woolworths cut its cash-withdrawal limit from $500 to $200 in September last year. This is a permanent change the supermarket attributes to customer preferences.
Yahoo Finance understands Woolworths will be operating as usual over the Easter period and does not anticipate any disruption over the long weekend. It has not made any changes to cash withdrawals or payment options.
Coles confirmed it had no plans to go cashless but said the cash withdrawal change reflected ongoing challenges in the industry.
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“Coles can confirm that normal cash collection and processing services from Armaguard have resumed," a Coles spokesperson said in an statement to Yahoo Finance.
"Customers can continue to pay with and withdraw cash at Coles supermarkets and liquor stores this weekend and ongoing.”
Armaguard rejects financial lifeline
Armaguard has rejected a $26 million financial lifeline offered by major Australian companies to prevent it from becoming insolvent. It was reportedly given until the end of the day to accept or reject the deal.
Major banks, supermarkets, Australia Post and retailer Wesfarmers proposed the package to the company last week, which would have allowed it to continue cash deliveries and pick-ups for about six months.
"Armaguard confirms it is working constructively with all its customers, including its retail customers, banks and other key stakeholders, regarding both short-term and long-term financial solutions for the industry to remain sustainable," Armaguard Group chief executive Mick Cronin said in a statement.
"Armaguard continues to operate its full suite of services and is confident that over the coming months, it will get the business onto a long-term sustainable footing with appropriate support from the industry."
It follows an emergency meeting on Wednesday chaired by Reserve Bank (RBA) governor Michele Bullock and attended by former ACTU secretary and Linfox director Bill Kelty representing Armaguard, which supplies almost 90 per cent of cash in Australia.
Cash use has been falling, with the RBA finding the share of consumer payments using cash fell from 70 per cent in 2007 to just 13 per cent in 2022.
RMIT associate professor of finance Dr Angel Zhong said consumer demand was driving Armaguard’s declining profitability and potential collapse.
“I am predicting that we will be entering into a functionally cashless society by 2030. That means the dominant approach of payment will be cashless payments,” Zhong told Yahoo Finance.
“That is being driven by consumer preference, which is what is driving what we are seeing today with Armaguard potentially collapsing.”
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