Regional banking inquiry: NSW tourism hotspot, Tasmanian business advocates to argue why cash is king

A NSW tourism hotspot which lost access to card transactions in a recent tech outage, and Tasmanian business advocates who view cash as “essential” to regional traders, will this week front a Senate inquiry into rising bank branch closures outside metropolitan Australia.

Businesses, councils, and banking representatives will speak at public hearings held by the Senate Standing Committee on Rural and Regional Affairs and Transport, as it considers the spate of regional bank branch closures and their effect on regional communities.

More than 650 bank branches have closed nationwide since 2017, a decline that some regional councils say has deprived small businesses and community groups of vital services, including cash deposits and withdrawals.

The banks have countered some of those claims, pointing to the near-universal acceptance of card transactions and the development of new online banking options capable of replacing in-person customer service.

The inquiry will hear from stakeholders in Launceston, Tasmania on Tuesday, including the Tasmanian Small Business Council, which argues physical banking services are essential for regional communities and small businesses.

Writing to the inquiry in April as Bendigo and Adelaide Bank mulled the closure of its agency service on Flinders Island, Tasmanian Small Business Council chair Geoff Fader said cash-handling services ought to be considered a minimum requirement.

“Small businesses in all communities, especially in regional areas, continue to report that cash transactions remain an essential offering for customers,” Fader said.

The inquiry will decamp to Canberra on Wednesday, where it will hear from banking leaders, before taking to Junee, NSW, on Thursday.

There, the committee will hear from Junee Licorice & Chocolate Factory, one of thousands of businesses across the map to lose access to card transaction services earlier this month when payment tech platform Square experienced major disruptions.

The hours-long outage forced businesses reliant on Square point-of-sale technology to accept cash, use bank transfers, rely on the platform’s ‘offline’ mode, or risk missing out on sales.

Speaking to SmartCompany during the outage, Rhiannon Druce, general manager of the tourist attraction, said the technical outage exposed the risk of relying on digital payment systems.

“We understand technology comes with its limitations but I think this highlights why cash still has an important place in our society,” said Druce.

The Rural and Regional Affairs and Transport References Committee will present its report on December 1.