Can businesses legally refuse to accept cash in Australia?

Does "legal tender" mean you can always pay with notes and coins?

News that the government is considering a ban on debit card surcharges from 2025 reminds us that paying by cash is the one payment method that doesn't generally attract a surcharge.

Physical cash use has been declining for decades, but cash remains the basis of our economy. But does that mean all businesses have to accept cash payments?

The belief that cash is "legal tender" and can't be refused by any business is very widespread. However, it's simply not true in Australia. Businesses can choose to accept payment in whatever form they like.

The Reserve Bank of Australia (RBA) covers this topic in detail on its website:

While that example talks about coins, this is equally true of credit card or EFTPOS payments. You can't insist that a business or service provider takes payments in cash, and this has always been the case legally in Australia.

It's true that most businesses will choose to take as many payment options as possible, to maximise their potential customer base. But there's no legal requirement for them to do so.

Since the coronavirus pandemic, we've seen a big surge in businesses only accepting card payments. We've also seen a decline in how often we use cash.

A massive 42% of Australians use cash once a month or less, Finder research shows. And while 44% of us say we do use cash at least weekly, that doesn't mean we use it all the time.

According to the RBA, just 13% of transactions in Australia are made with cash, and those account for just 8% of all transactions by volume.

The most common industries that only take cash payments are hairdressers, plumbers and child minders, RBA research found.

According to Commonwealth Bank data, cash withdrawals dropping by 51% between 2018 and 2023.

Do laws about legal tender in Australia vary by state?

In Australia, laws regarding currency apply nationwide, no matter which state or territory you live in.

That's different to the US, where some cities and states do have laws that make it illegal to refuse to accept cash.

On social media, I've seen people share US examples and suggest that this also applies in Australia. That's not correct.

Do businesses have to offer a surcharge-free option?

An important related law: businesses are allowed to impose a surcharge for payments made by credit card or through credit card networks, but that surcharge can't exceed the actual cost of processing. If the business pays 1% for credit payments, it can only surcharge 1%.

And it's not true that businesses must offer a surcharge-free option. Again it's a sensible practice to do so, and if a business is only allowing payments by credit card and always charging a surcharge, it's simpler just to incorporate those surcharges into its overall pricing. But provided the business is up-front about what the charges are and the total cost you'll pay, there's no legal obligation in Australia to offer an alternative.

Of course, many businesses charge nothing, and choosing those is wise. We've got tips on how to minimise or avoid those surcharges.

One other thing. Even businesses that choose to accept cash can refuse to accept large numbers of coins.

No business is obliged to take more than $5 in 5 cent, 10 cent, 20 cent or 50 cent coins, more than $10 in $1 coins or more than $20 in $2 coins. This video explains the rules further:

We updated this guide in October 2024 with information on proposed credit card reforms.