Coles, one of Australia’s leading supermarket chains, has recently made a significant decision regarding cash withdrawal limits amid concerns over the financial stability of transport company Armaguard. This move comes after Armaguard faced financial difficulties due to a decline in cash delivery demand as consumers and businesses increasingly opt for online transactions.
Armaguard, which has been a monopoly cash transit business in Australia since its establishment in 1938, approached major retailers and banks in October 2023 for funding to stay afloat. In response, Wesfarmers, Coles, Woolworths, and Australia Post offered a $26 million rescue package on March 19. However, Armaguard rejected the deal on March 28 as it did not want to open its books for due diligence. Instead, the company announced that it had secured funding from its parent company, Linfox, and would negotiate with clients to revamp its loss-making business.
Coles initially paused all currency orders with Armaguard until April 5 and reduced withdrawal limits for customers from $400 to $200 due to concerns that Armaguard’s financial instability could lead to cash shortages. However, Armaguard assured Coles that it was confident of remaining financially viable in the long term. As a result, Coles resumed delivery orders by the afternoon of March 28, allowing customers to continue paying with and withdrawing cash at their supermarkets and liquor stores.
The decision made by Coles to increase cash withdrawal limits is a relief for customers who rely on cash transactions, especially during the Easter holiday season. This move ensures that shoppers have access to the cash they need without any disruptions caused by Armaguard’s financial situation.
Armaguard’s struggle highlights the ongoing shift towards cashless transactions in Australian society. In early March, Bankwest announced the closure of 45 branches in Western Australia as it transitioned into a digital-only bank. The bank cited that 97 percent of its transactions were conducted digitally, with only two percent of customers visiting branches. While this move has been met with criticism and concerns about the future of cash transactions in Australia, it is clear that the country is steadily moving towards a cashless society.
As Armaguard works towards finding long-term financial solutions and securing support from the industry, it remains to be seen how the company will navigate the changing landscape of cash transactions. With the rise of digital payments and online transactions, traditional cash transit businesses like Armaguard may need to adapt their strategies to remain relevant in the evolving market.
Overall, Coles’ decision to increase cash withdrawal limits provides reassurance to customers during a time of uncertainty. It ensures that they can continue to conduct cash transactions conveniently, despite concerns over Armaguard’s financial stability. As the push towards cashless transactions continues in Australia, it will be interesting to see how companies like Armaguard adapt and thrive in the changing landscape of the financial industry.
