How I found myself agreeing with cash king Bob Katter

I’ve found myself in furious agreement with Queensland politician Bob Katter about one issue – that businesses should accept cash.

Last month Katter was fired up because a cafe in the Australian Parliament House initially refused to accept his $50 note, telling him it was a cashless business. Katter told them it was too bad for them because cash was legal tender, and they legally had to accept it.

Queensland MP Bob Katter in parliament in 2022.Credit: Alex Ellinghausen

He went on Sky News to explain himself. “If you have a cashless society, the banks control your life, you’re not able to buy a loaf of bread without permission from the banks,” Katter said. “It’s bad enough now but it will become infinitely worse.”

Like most Australians, I lost the cash habit at some point in the past decade, content to tap away to pay for everything from coffee to groceries. I often have no cash in my wallet.

Recently, though, I’ve been trying to change that. I started noticing that more and more retailers, especially cafes and small shops, were imposing surcharges for card payments. Being the former Money editor of this masthead, I knew how quickly little amounts can add up. I’ve also been finding that an increasing number of businesses no longer accept cash. I’ve encountered this several times in the month since Katter’s run-in at the Canberra cafe.

On the Saturday before last, I was unfortunately not at the second Taylor Swift concert, having failed to find tickets. Nor was I at the Bondi Beach Party, murdering the dance floor with Sophie Ellis-Bextor. But I was at the Capitol Theatre, seeing the entrancing Australian Ballet production of Alice with my daughter.

The Australian Ballet production of Alice in Wonderland.Credit: Louie Douvis

I was surprised to find that the bar at the theatre is cashless. The bartender informed me that this was stated in the terms and conditions of sale when I bought my tickets. The website confirms the policy but does not state a reason.

Earlier in February, I came across the same phenomenon at Spice Alley, off Broadway, where there is a collection of small food stalls and shared tables in a central courtyard. I wanted to give my teenagers cash, so they could go and choose their own meals, but the stalls were all cashless, forcing us to go one by one. One of the stallholders told me that Spice Alley management did not allow them to take cash, but customers could load currency onto a cashless payment card at a central cashier. The Spice Alley website says the policy is to improve “speed of service, safety and hygiene”.

Like Katter, I thought cash was legal tender and that businesses had to accept it. It turns out we were both wrong. The Australian Competition and Consumer Commission website states that businesses can choose which payment types they accept, but consumers have to be informed before they make the purchase.

Informing customers can be as simple as a sign at the cash register, or a notice on a website, which feels like a loophole. There’s no doubt card payments are convenient, but we’re all paying the price, and we should have a choice.

A cashless society is not a globalist conspiracy, but it is a capitalist one because the banks and other financial institutions are making a fortune from card payment fees.

How much exactly? I’m glad you asked.

Reserve Bank figures show, in the year ended December 2023, there were about 3.6 billion credit and charge card transactions and 11 billion debit card transactions in Australia. The business is charged a merchant service fee every time someone pays with a card. Sometimes they have a package deal, but on average, it ranges from 0.35 per cent of the transaction for eftpos to 1.69 per cent for Diners Card. The merchant acquirer – the big four banks and newcomers such as Stripe – and the card issuer all get a cut.

Businesses are legally allowed to pass on the cost directly to consumers in the form of a surcharge. My hunch that surcharging is becoming more common was on the money: businesses passed on a surcharge to consumers on 7 per cent of transactions in 2022, up from 5 per cent in 2019. The median surcharge was 50c per transaction.

My rough and ready calculation is that Australian consumers are directly paying $511 million a year for the privilege of paying with a card. The rest of the time, the retailers pay instead – and consumers pay indirectly.

Lance Blockley, the managing director of The Initiatives Group, a payment consultancy, estimates that Australian businesses are charged $5.8 billion a year – $3.5 billion for credit and charge cards and $2.3 billion for debit cards.

In Katter’s Sky interview, he made a leap from talking about cash to warning against “intermittent power” aka renewable energy. At this point, he lost me. He’s wrong about renewables, but not about cash.

Caitlin Fitzsimmons is a social affairs reporter in the Sydney newsroom and the former Money editor for the Herald and The Age.