Agreement aims to ensure cash access and industry sustainability
The Australian Banking Association (ABA), major banks, and leading retailers have reached an agreement with Armaguard to provide a 12-month financial contribution for its Cash-in-Transit business.
Armaguard will receive approximately $50 million in financial assistance over the next year, contingent on meeting monthly key performance indicators and other conditions.
The agreement, which includes a commitment to develop an independent pricing mechanism to support a sustainable cash delivery business in the long term, follows a series of roundtables led by the Reserve Bank of Australia to discuss the sustainability of the wholesale cash distribution system.
The funders include ANZ, Australia Post, Coles, Commonwealth Bank of Australia, National Australia Bank, Wesfarmers, Westpac, and Woolworths Group. The Australian Banking Association led the negotiations with authorisation from the Australian Competition and Consumer Commission (ACCC).
With the decline in the use of cash becoming a global trend, the major users and cash operators are collaborating to ensure the industry remains economically viable, improves productivity and efficiency, and maintains the capacity for investment.
They are also working together to uphold the highest standards of safety and security, and provide public access to cash at the lowest possible price consistent with security and safety commitments. An independent pricing mechanism is also aimed at achieving more efficient and predictable pricing.
“This is not a contest between the parties,” said Linfox Armaguard executive chairman Peter Fox (pictured left). “There are no winners and losers here.
“No other nation has major banks, retailers and key distribution companies working together to achieve a more efficient Cash-in-Transit industry. Armaguard is also leveraging the expertise of its other shareholder, Prosegur, which is one of the world’s leading cash companies.”
ABA chief executive Anna Bligh (pictured right) added that the deal will keep cash moving around the country and ensure it remains available to Australians wherever they live.
She noted that the banks’ and retailers’ agreement with Armaguard reflects the fact that issues facing the sustainability of Cash-in-Transit services will only be addressed by the collective efforts of the relevant parties.
“The 12 months of financial support also gives Armaguard the necessary time to restructure the business and realise the benefits from their merger with Prosegur,” Bligh said. “It also allows all parties to work through possible long-term solutions for sustainable cash access into the future.”
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