Reserve Bank chief issues dire warning about the future of cash – and reveals what will be happening next to the $5 banknote

The Reserve Bank of Australia chief has warned the future of cash is in jeopardy because it’s expensive to distribute banknotes.

Michele Bullock issued a bleak picture of cash distribution during her first appearance before a parliamentary committee as RBA Governor.

‘As the use of cash for transactions has declined, the economics of cash distribution has come under pressure,’ she said on Friday.

‘This was one of the main factors behind the merger of the two largest cash-in-transit providers last year.’

Armaguard and Prosegur Australia last year gained regulatory approval to merge, giving the new company Linfox Armaguard a 90 per cent share of Australia’s cash-in-transit market.

This was based on a promise to the Australian Competition and Consumer Commission that it would continue to deliver cash until 2026.

‘Linfox Armaguard has since indicated that despite this, its cash distribution business remains unsustainable,’ Ms Bullock said. 

‘The RBA places a high priority on the Australian community having good access to cash withdrawal and deposits.’ 

Before the merger, Armaguard had distribution agreements with Commonwealth Bank, ANZ and NAB, while Prosegur, a Spanish company, had a deal with Westpac.

Ms Bullock said she would continue meeting with cash distribution industry leaders. 

‘These discussions are likely to continue for some months,’ she said. 

‘In developing a model for cash distribution that’s sustainable in the long term, it’s going to require addressing some very complex issues and it’s going to take some time to work through.

‘So I’ve encouraged the major players to  

Ms Bullock also revealed the RBA, which owns polymer banknote manufacturer Note Printing Australia, would be consulting with Indigenous groups on the design of the new $5 note, following the death of the Queen in 2022.

During the last financial year, 718 automatic teller machines were removed, Australian Prudential Regulation Authority data showed.

This occurred as 424 bank branches closed in the year to June.

The number of branches has plunged by more than a third or 37 per cent since June 2017, but in six years, the number of ATMs has plummeted by 59 per cent.

Australia has 5,693 ATMs still in existence – less than half the 13,814 level of June 2017.

The number of bank branches has fallen to 3,588, down from 5,694.