'Crucial' cashless move 'complacent' Australia must follow as more people 'shut out': 'Must be prepared'

Norway has recently updated its legislation to force businesses across the country to carry and accept cash despite digital payments becoming more popular. The Scandinavian nation brought in the new rule on October 1 to give consumers more protections when they shopped and paid for essential goods and services with cash.

The Norwegian government said that while the cashless revolution is showing no signs of slowing down, research found as many as 600,000 citizens avoid digital payments altogether and rely on cash. The Financial Agreements Act was redefined so those people and others weren't left behind.

It's clear Aussies want something similar done here, with a poll of more than 18,000 Yahoo Finance readers showing 88 per cent believe businesses should be forced to have cash payments available.

Australian politician Bob Katter is trying to do this and told Yahoo Finance that while digital payments are more popular, there should always be a place for cash.

"The banks have powers in Australia exceeding their powers anywhere else in the world...it's a battle worth fighting," he said.

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Why is Norway protecting the availability of cash?

Mobile wallet payments overtook cash in popularity for Nordic countries last year and have some of the highest rates of usage in the world.

According to Norway's central bank, the country also has the highest annual use of payment cards per inhabitant, with the average Norwegian using a card 550 times to pay for something in 2023.

"Physical payment cards were used for most of these payments, but the number of card payments through mobile phones is rapidly increasing," Norges Bank said.

"Our latest survey shows that 20 per cent of payments at a physical point of sale were made using various mobile payment platforms."

Even though the nation appears to be moving further and further away from cash, it wants to make sure there is still space for those who depend on it.

"The government believes that these groups must have the same opportunity to pay as everyone else, and has therefore ensured that the right to pay with cash is strengthened," it said earlier this year.

Minister for Justice and Emergency Emilie Enger Mehl added: "The regulations have been too unclear. People must be confident that they can pay when they go to the shop, restaurant or to the hairdresser."

"This will be a change in the law that will stand the test of time, both for the sake of social security and for the sake of the individual, so that people who use cash do not fall outside society."

The move means every business and service will have to ensure cash is available and accepted for all customers.

The Norwegian government believes this will not only protect cash users but encourage everyone to keep physical money on them in case of emergencies.

"The government takes society's preparedness seriously," Mehl said.

"The world around us is becoming increasingly troubled, with war, digital threats and climate change. We must be prepared for long-term power outages, system failures or digital attacks that lead to the failure of the digital payment solutions."

The CrowdStrike outage that occurred in July is proof that there can be times where cash is king.

Norway joins other countries in protecting cash

The Nordic country is one of several others that have introduced measures to protect cash in the digital age.

In France, cash is legal tender and it's illegal for businesses to refuse it as a form of payment.

Banque France, the country's central bank, revealed in 2022 that cash still accounted for 50 per cent of all point-of-sale (POS) payments.

However, it is slowly declining, with that number being 7 per cent lower than three years ago.

"The fact that cash is legal tender guarantees that everyone has the freedom to choose how they wish to pay," France's central bank declared last year.

"Euro banknotes and coins must therefore be available to the public at all times and universally accepted, as they are often the only means of payment possible for the most financially vulnerable."

Ireland also hopped on the trend earlier this year with its Access to Cash Bill.

The legislation requires supermarkets, pharmacies and convenience stores to always carry physical money to ensure people can access cash whenever they need.

The policy will also require there to be a minimum number of ATMs available across eight geographic regions in Ireland. Banks and ATM providers could be penalised if they don’t stick to the new rules.

Calls for Australia to follow suit

While cash is legal tender in Australia at the moment, businesses and services aren't obligated by law to accept it.

Cash Welcome campaign coordinator Jason Bryce told Yahoo Finance he would love to see legislation like Ireland's introduced in Australia.

“Some people rely on cash, trust cash, they do their budgeting with cash, they take their money out on payday or pension day, and that's their money for the fortnight," he said.

“The people who use cash have rights and we think those rights are enshrined in law. They're not. Australia needs to follow Ireland and ensure that people can use cash, our legal tender to buy their food, their essential groceries and their medicines.”

Older Australians still predominantly use cash in Australia and the move towards a cashless society can be harmful if they have no way to pay.

Patricia Sparrow, Council on the Ageing Australia CEO, told Yahoo Finance that cash users ought to be protected wherever they go.

"Norway's bold move to legislate cash acceptance is in stark contrast with Australia's complacency in our cashless rush," she said.

"Here, many older Australians find themselves stranded in an increasingly digital landscape. The influx of bank branch closures and the growing number of cashless businesses have effectively shut out a significant portion of our older population.

"While we acknowledge the benefits and opportunities that digitisation can bring, it's crucial that this transition is managed inclusively and accessibly for all Australians, particularly our older generations. As we move forward, we must take deliberate steps to ensure that no one, especially older Australians, are left behind in this digital transformation."

What is Australia doing about the push towards a cashless society?

Despite Australia being one of the biggest users of digital payments, politicians have agreed that something needs to be done to strike a balance.

Politicians Andrew Gee and Katter introduced a bill earlier this year that aims to keep physical money in circulation called the Keeping Cash Transactions in Australia Bill 2024.

“Many people, across both my electorate of Calare and around our great country, hold concerns and fears that the use of cash for transactions in Australia is being phased out and will soon disappear,” Gee said.

Katter added: "Taking away cash, and thereby taking away the choices and freedoms of the people, is fundamentally unfair. With cash, we control it; we control how we spend it and save it.

"If we go cashless, we relinquish our control to a handful of CEOs who run the banks. These individuals, who earn millions of dollars, can make decisions about our money with the mere click of a button."

If legislated, the bill would require all businesses that provide goods and services in "face-to-face settings" that are based in a "premises, structure or vehicle" to accept payment in cash if the transaction isn't more than $10,000.

The maximum civil penalties for not upholding this rule would be $5,000 for a person and $25,000 for a body corporate.

The proposed law does allow for some exceptions. Businesses could be exempt from carrying and accepting cash if:

• offering to accept payment in cash would pose a reasonable security risk

• offering to accept payment in cash would be contrary to another law of the Commonwealth or a law of a State or Territory

• offering to accept payment in cash would be contrary to current health advice issued by an official or agency of the Commonwealth or of the State or Territory in which the transaction is made

• cash in the form of change for the purposes of the transaction is needed but not readily available

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