Shrinking Bank ATM Networks Are Killing Cash Softly

While many people are lamenting the demise of cash and the rise of tap-and-go card payments and their associated surcharges, there is one simple reason why Australians have ditched cash.

In simple terms, it is much harder to get your hands on it than it used to be.

Banks have been radically shrinking their ATM networks, and many of the remaining ATM’s are owned by non-bank companies that charge a fee to use them.

Which Came First?

Did the dramatic rise in card payments mean we need much less cash?

Or have banks that must support large branch and ATM networks been working hard to steer payments away from cash?

The numbers are quite stark, although it is one of those chicken and egg situations.

With banks being forced to stump up a staggering $50 million a year in handouts to keep Australia’s major cash-in-transit company Armaguard solvent, the costs of cash and keeping a large branch network are certainly substantial.

Few Cash Options for Country Areas

Increasingly, though, large country areas are being left with much fewer options to withdraw and deposit cash or to withdraw and deposit using ATMs and this alone is driving more traffic onto tap-and-go and online banking.

This, in turn with aggressive cost cutting by banks, has led to financial difficulties being faced by Armaguard’s owner, the billionaire transport magnate Lindsay Fox and his family.

Armaguard handles around 90% of cash delivery in Australia after merging with the Australian arm of rival Prosegur in 2023.

ATM Numbers Have Halved

According to Australian Prudential Regulation Authority (APRA) figures, the number of ATMs has more than halved in just seven years from 13,814 in June 2017 to just 5,476 in June 2024.

Those numbers are sure to have dwindled further since then and it is unlikely that Treasurer Jim Chalmer’s foreshadowing of the banning of fees on debit card transactions – and possibly also credit cards from the start of 2026 – will slow the move away from cash availability.

At the moment, consumers are estimated to spend $1.2 billion a year in surcharges on payments each year and any move to include such fees in business prices instead are likely to reduce the use of cash ever further.

The distribution of cash has become significantly unprofitable which is why the big four banks joined with larger retailers including Woolworths and Bunnings, Kmart and Officeworks owner Wesfarmers to extend a lifeline to Armaguard until December.

Will Armaguard’s Support Continue?

It is unknown whether banks will continue their financial support will continue after December, with cash now representing just 13% of in-person transactions.

The Council of Financial Regulators – which includes the RBA and the Australian Competition and Consumer Commission – has proposed a new federal minister in charge of cash distribution who would have oversight over a registered entity that would “provide critical cash services to a significant part of the market.”

It has said that despite the rise of digital payments, cash remained vital for many Australians, particularly in regional and remote communities.

The Federal Government last year announced a cash mandate would be coming into force on January 1, 2026, requiring businesses to offer customers a cash option.