HOW ARMAGUARD'S FIGHT FOR SURVIVAL COULD SPELL THE END OF CASH IN AUSTRALIA FOREVER - AS SUPERMARKET GIANT ISSUES CARD ONLY WARNING
- Monopoly cash transit firm Armaguard at risk of folding
- Banks scrambled to offer rescue package
- READ MORE: Coles suspends cash transactions over Easter
Australia's only secure cash transport company is teetering on the edge of collapse which, if it does fold, could spell a rapid acceleration towards a cashless society.
Armaguard on Thursday rejected an emergency $26million rescue package put together by the major banks and retailers and instead said it would rely on $10million in extra funding injected by parent company Linfox.
The cash transit business has a monopoly since merging with competitor Prosegur last year but has been struggling as the use of physical cash is jettisoned in favour of convenient tap-and-go, card and electronic payments.
Supermarket giant Coles paused all cash delivery services over Easter concerned that if Armaguard went into administration it could lose any cash stuck enroute in its trucks.
Morning 3AW host Tom Elliot warned on his program on Thursday that a collapse of Armaguard would mean transportation of cash around the country would halt.
'What would happen? Well if a company like Coles can't move money from A to B they will stop allowing you to use cash at the supermarket,' he said.
'You get cash from a bank or ATM, how does the cash get there? Well an armoured car has to drive it there.
'If Armaguard goes bust that would pretty much be the end of cash.'
Numerous concerns have been raised about a shift to a cashless society including the fees accompanying each purchase, the reliance on electronic platforms that could be hacked or suffer outages, the loss of privacy afforded by cash payments, and the difficulties faced by the elderly or those escaping domestic violence.
Coles said on Thursday afternoon it had resumed deliveries of cash after Armaguard signalled it was confident of staying financially viable in the long term.
Armaguard is a subsidiary of billionaire Lindsay Fox's logistics company Linfox.
Coles had paused all currency orders until April 5 and reduced withdraw limits from $400 to $200.
However, Armaguard deliveries to Coles resumed on Thursday afternoon, it said.
'Coles can confirm that normal cash collection and processing services from Armaguard have resumed,' a spokesperson confirmed.
'Customers can continue to pay with and withdraw cash at Coles supermarkets and liquor stores this weekend and ongoing.'
In late October, Armaguard approached some of the nation's biggest retailers and banks to request a cash injection to keep providing distribution services after its merger with competitor Prosegur was approved.
On March 19, the big four banks, Wesfarmers, Coles, Woolworths and Australia Post offered a package in the vicinity of $26 million that included some conditions.
It was enough to support the company for about six months and there was no expectation for it to be repaid.
The group wanted an answer by Thursday afternoon but Armaguard reportedly turned down the offer after opting for a $10million injection by Lindsay Fox instead.
The cash transport business sought to reassure customers it will continue to operate as normal.
'Armaguard confirms it is working constructively with all its customers, including its retail customers, banks and other key stakeholders regarding both short-term and long term financial solutions for the industry to remain sustainable,' chief executive Mick Cronin said in a statement.
'Armaguard continues to operate its full suite of services and is confident that over the coming months, it will get the business onto a long term sustainable footing with appropriate support from the industry.'
It comes after Armaguard representative Bill Kelty met with Reserve Bank Governor Michele Bullock and senior figures from Australia's banking industry on Wednesday in a bid to find a solution to the company's woes.
The Transport Workers Union, which represents about 700 Armaguard workers, called on the business' clients to find a solution.
National Secretary Michael Kaine said workers needed certainty.
'The (union) is engaged in ongoing discussions with Armaguard to protect workers,' Mr Kaine said.
Linfox has been approached for comment.
Read more 2024-03-28T04:37:08Z dg43tfdfdgfd