AST CC Collaboration on Cash Access

On Dec. 6, AST CC granted interim authorization to AST BAC, banks.

  • AST CC published Australian Banking Association Ltd application for authorisation AA1000654 interim authorisation decision (of Dec. 6, 2023), which grants interim authorization to collaborate to maintain the physical distribution of cash in economy.
  • It was granted to AST BAC, its member banks, other relevant industry participants to discuss, develop arrangements to maintain physical distribution of cash in economy.
  • Follows AST CB Nov. 2021 reviewed banknote distribution arrangements, #121513.
  • Other Material
  • AST CC released Application for interim and final authorisation under s88(1) of the Competition and consumer act 2010 (cth) (of Nov. 30), which is a copy of application.
  • In addition, the AST CC also published the letter (of Dec. 6, 2023) from AST CC to interested parties in relation to interim authorization decision and consultation process.
  • Interim Authorization
  • Interim authorization gives statutory protection from AST Court action for conduct that might otherwise raise concerns under the Competition and consumer act 2010 (cth).
  • The authorization application came after concerns expressed by the major supplier of cash-in-transit services in Australia, Armaguard, that the industry is not sustainable in its current form; AST CC said cash-in-transit services involve providing cash transport.
  • In addition, involves providing management and processing services re the same.
  • These services are provided to banks, retailers as well as independent ATM operators.
  • AST CC said the interim authorization relates only to discussions and reaching in-principle agreements about an industry response to support ongoing access to cash.
  • AST BAC advised that before adopting and implementing an agreed industry response, it would seek separate AST CC authorization for the proposed way forward, if required.
  • A key condition of this interim authorization is that the AST BAC report on their discussions to maintain access to cash in regional and remote areas; this will be an important consideration for any future application for authorization by the industry.
  • AST BAC Comments
  • On the same day, AST BAC commented in relation to the interim authorization.
  • Customers' usage of cash has plunged; changing nature of cash usage is creating strain on distribution system; said banks are taking action to support AST GVT.
  • Namely, to ensure that people who need or want to use cash can still get access to it.
  • This interim authorization covers banks along with retailers like supermarkets and non-bank ATM deployers, Australia Post along with other businesses who utilise cash.
  • Effectiveness
  • AST BAC is required to provide each report on or before the 15th day of each month and the first such report is required to be provided on/before Jan. 15, 2024.
  • The interim authorization is granted until Jun. 30, 2024.
  • Apr. 2024 Linfox Armaguard
  • On Apr. 2, 2024, AST BAC acknowledged Linfox Armaguard's statement that it will not be taking up financial support from a collective of banks, retailers and supermarkets.
  • AST BAC welcomed Armaguard’s commitment that it will continue to operate and have secured funds from their parent company to maintain their full suite of services.
  • The banking sector remains committed to ensuring cash is accessible for customers.
  • May 2024 Authorization Granted with Conditions
  • On May 27, 2024, AST CC said it has granted authorization with conditions to AST BAC, Customer Owned Banking Association banks, retailers, other industry players.
  • This authorization allows them to continue developing responses to support the distribution of cash across country, and it only relates to discussing and reaching in-principle agreements about industry responses to providing ongoing access to cash.
  • Authorization ends Oct. 31, 2024; AST CC reminded BAC will be required to separately apply to AST CC for authorization to cover implementation of any industry responses.
  • Separately, in Mar. 2024, BAC lodged an application for authorization in order to enable BAC, its member banks, and other industry participants who distribute and/or utilize cash in their businesses to discuss and implement measures in certain circumstances.
  • Namely, in the event of, or in reasonable anticipation of, a disruption to supply of cash.
  • AST CC explained that it granted interim authorization with conditions in Mar. 2024.
  • That application is currently being assessed by AST CC prior to making a decision on it.
  • In Jun. 2024, AST PRL issued bill on keeping cash transactions in Australia, #214359.
  • In Jun. 2024, AST CB issued committee hansard, re cash-in-transit, see #216427.
  • Jun. 2024 AST BAC on Agreement with Armaguard
  • On Jun. 25, 2024, AST BAC issued interview with AST BAC CEO Anna Bligh on ABC Brisbane re agreement with Armaguard, in which firms agreed to bail out Armaguard.
  • The AUD 50mn amount, which is to be paid to Armaguard by the country's largest banks, along with big supermarkets like Coles and Woolworths, Bunnings and Australia Post, is aimed at ensuring that cash can get to people for the next 12 months.
  • Interview discusses potential of Armaguard not being able to restructure its business.
  • On same day, AST BAC issued transcript of interview with Bligh on ABC News Breakfast re the agreement with Armaguard; Bligh said deal is a great outcome for Australians.
  • Agreement gives Armaguard chance to do some restructuring, gain more efficiencies.
  • Namely, it gives banks, big retailers, Australia Post the chance to standardize their service levels, making Armaguard much more efficient, effective, sustainable in long term.
  • She said this is 12 months of breathing space; at end of that 12 months, she does not think Armaguard will look the same as now; hope is that it will be much more viable.
  • Jul. 2024 AST CC Granted Interim Authorization
  • On Jul. 3, 2024, AST CC published Australian Banking Association Ltd application for authorisation AA1000674 interim authorisation decision, to allow AST BAC, banks and retailers to provide financial contributions to cash-in-transit business Armaguard.
  • The parties are also seeking to develop (but not implement) an independent pricing mechanism in respect of their cash services agreements with Armaguard.
  • AST CC seeks views, by Jul. 24, 2024, regarding the operational sustainability and efficiency measures and independent pricing mechanism aspects of proposed conduct.
  • Indicative date for AST CC publishing final determination is Nov. 2024 or Dec. 2024.

Regulators AST BAC; AST CC
Entity Types CNSM; Corp; MSB
Reference Dec AA1000674, PR 78/24, 7/3/2024; PR 6/25/2024; Dec AA1000654, PR 61/24, 5/27/2024; PR 4/2/2024; Dec AA1000654, Lt AA1000654, PR 152/2023, 12/6/2023; Info, PR 11/30/2023; Citation: Competition and consumer act 2010 (cth);
Functions Compliance; Legal; Market Conduct; Operations; Product Administration; Reporting
Countries Australia
Products Payments
Regions AP
Rule Type Final
Rule Date 12/6/2023
Effective Date 7/24/2024
Rule Id 193861
Linked to Rule :121513
Reg. Last Update 7/3/2024
Report Section International

Last substantive update on 07/06/2024