The Federal Government has taken a significant step towards ensuring cash remains a viable payment method for everyday essentials with the release of key draft regulations that would mandate acceptance of cash for fuel and grocery purchases.

The draft regulations, drawn up after public consultation earlier this year, prescribe that the cash acceptance mandate for fuel and groceries shall be limited to in‑person transactions of under $500.

Small businesses with aggregate turnover of under $10 million – or if the business is part of a franchise arrangement, in which the franchise arrangement’s turnover is under $10 million – and companies that find it difficult to deal with cash transactions, are exempted from the regulations.

“We recognise that Australians are increasingly using digital payment methods, but there will be an ongoing place for cash in our society under the government,” said Daniel Mulino, Assistant Treasurer and Minister for Financial Services. “This is a balanced, practical, and sensible step to support cash users and give consideration to businesses.”

The Federal Government stated that it will review the mandate after three years to ensure that the policy is “functioning as intended where it matters most.”

The government will also take into consideration during the review whether the mandate should be expanded to other businesses, alongside its impact on currently-affected companies, and any developments in cash distribution and access.

Earlier in July, the Council of Financial Regulators and the Australian Competition and Consumer Commission released a consultation paper which put forward a series of proposals on regulating cash distribution.

“We will consider CFR recommendations to the government carefully, along with industry feedback, and work hard to ensure that Australians can keep accessing cash,” Mulino said.

• This story was originally published on Inside Small Business.