Are cash vs card-only businesses the future? Here's the impact on consumers

Australia Broadcast Center

11-05-2025

Notes and coins aren't just favoured at this inner west Sydney restaurant — they're king.
Nestled near the gelato booth lies an ATM machine inside the Leichhardt venue, with "cash only" signs on display.
Cash has been the primary source of payment here since 1952.
"We're just continuing a legacy," Bar Italia owner Con Damouras said.
There's no chance of skim, light or soy milk in your coffee either. Mr Damouras prefers the "old school trattoria" approach.
The business doesn't take credit cards. Instead, an in-house ATM is available, which has a $2.50 withdrawal fee, or there are other outlets along Leichhardt's main strip.
Post-pandemic, Mr Damouras installed an online payment form customers can use instore, though cash remains the predominant payment method.
"Some days people come in and say to you, 'Oh you're a tax thief, you're not paying the right tax'. It doesn't work that way when you've got a high-profile business like this … we always have done the right thing," he said.
"We keep our prices low, and we don't want to pay bank fees."
Since 2017, Pablo & Rusty's Sydney CBD venue has been cashless.
"Initially there was some curiosity around it … questions around our motivation," operations manager and co-owner Chris Tate said.
"I think the majority of customers understood there was a degree of speed and convenience that resulted in us going cashless."
"Efficient service", no awkward cash handling and counting at the till and hygiene influenced the decision as well as operational challenges associated with holding cash, Mr Tate said.
"It's safer for our staff … we're not having to hold cash on site and send staff to the banks at the end of the shift."
While visitors can use cash on their first visit if unaware of the rule, it's ultimately a card-only business model.
Surcharges aren't passed onto takeaway orders, but for those who dine in, there are "small fees attached" for using the table ordering app service, Mr Tate said.
"We understand this can be a sensitive issue for some customers. It's not about making a political statement. It's a practical and pragmatic one."
Lyla Zhang, associate professor in Macquarie University's Department of Economics, said while cash use had decreased, it still served a critical purpose.
"Cash use has declined to about 10 per cent of transactions in Australia — especially for older Australians or people living in remote areas," she said.
"It all comes to people's preferences and their circumstances.
When it comes to cash benefits, Dr Zhang said it helped people stick to a budget and avoid withdrawal transaction fees.
Convenience wise though, card payments are the more streamlined option — but come with a catch.
"The card offers convenience, transparent transactions, rewards programs but it exposes people to overspending and surcharge fees," Dr Zhang said.
"Let's say the average household spending in Australia is around $3,000 per month. If the surcharge is only 1 per cent, this still means $30 per month for the family.
"This sounds very small, but over time they can accumulate."
The Reserve Bank of Australia estimated Australians lose nearly $1 billion in surcharges a year.
Although the use of digital-only payments is likely to lead to paying more fees, Dr Zhang said consumers should simply "be aware" of surcharges.
"As an experimental and behavioural economist, I think we should all make informed decisions about which type of payment we want to to choose.
For Mr Damouras, he carries both card and cash when shopping or dining, aware that "if that's their policy" either way, he will follow it.
Mr Tate added that it should continue to be up to individual businesses to choose what currency they primarily accept.
As Ms Zhang said: "There's no one-size-fits-all solution."
In November , the federal government announced it would mandate that businesses must accept cash when selling essential items from 2026 onwards.
While details are to be ironed out post-election, Mr Tate remained unsure if his cafe would be deemed "essential" and therefore subject to the rule.
"If we're having to cover the additional cost of handling cash … that poses significant challenges for small businesses," he said.
In a statement an Australian Competition and Consumer Commission (ACCC) spokesperson said that currently "businesses can choose which payment types they accept" though transparency is key.
"Businesses should be clear and up-front about the types of payments they accept, any applicable payment surcharges, and the total minimum price payable for their goods and services."