Australia’s only secure cash transportation company is on the brink of collapse which, if closed, could mean a rapid acceleration towards a cashless society.
Armaguard on Thursday rejected a $26 million emergency rescue package put together by major banks and retailers and instead said it would rely on $10 million in additional funds injected by parent company Linfox.
The cash transport business has had a monopoly since it merged with competitor Prosegur last year, but has been struggling as the use of physical cash in Australia is scrapped in favor of convenient tap-and-go payments, with card and electronic.
Supermarket giant Coles halted all cash delivery services over Easter, worried that if Armaguard went into administration it could lose cash stuck on the road in its trucks.
Morning 3AW presenter Tom Elliot warned on his show on Thursday that a collapse of Armaguard would mean transporting cash across the country would stop.
‘What would happen? “If a company like Coles can’t move money from A to B, they will stop allowing you to use cash in the supermarket,” he said.
‘You get cash from a bank or an ATM and how does the cash get there? Well, an armored vehicle has to get there.
“If Armaguard goes bankrupt, it would practically be the end of cash.”
Armaguard has accepted additional funding of $10 million from owner Linfox to maintain cash flow in Australia.
Numerous concerns have been raised about the shift to a cashless society, including the hidden fees that accompany every purchase, reliance on electronic platforms that could be hacked or disrupted, the loss of privacy that cash payments provide, and the difficulties that older people or those who run away face. Domestic violence.
Coles said on Thursday afternoon it had resumed cash deliveries after Armaguard indicated it was confident it would remain financially viable in the long term.
Armaguard is a subsidiary of Linfox, billionaire Lindsay Fox’s logistics company.
Coles had suspended all foreign exchange orders until April 5 and reduced withdrawal limits from $400 to $200.
However, Armaguard deliveries to Coles restarted on Thursday afternoon.
“Coles can confirm that normal Armaguard cash collection and processing services have resumed,” a spokesperson said.
“Customers can continue to pay and withdraw cash at Coles supermarkets and liquor stores this weekend and beyond.”
In late October, Armaguard approached some of the country’s largest retailers and banks to request a cash injection to continue 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 of around $26 million that included some conditions.
It was enough to sustain the company for about six months and there was no expectation of repayment.
The group wanted a response Thursday afternoon, but Armaguard reportedly rejected the offer after opting for a $10 million injection from Lindsay Fox.
The number of ATMs supplying cash in Australia has been depleted in recent years and the ATMx network run by Armaguard is likely to disappear if it is withdrawn.
However, the cash business sought to assure customers that it will continue to operate as normal.
“Armaguard confirms that it is working constructively with all its clients, including its retail customers, banks and other key stakeholders, regarding short and long-term financial solutions to keep the industry sustainable,” said chief executive Mick Cronin in a statement.
“Armaguard continues to operate its full suite of services and is confident that in the coming months it will put the business on a long-term sustainable footing with appropriate industry support.”
It comes after Armaguard representative Bill Kelty met with Reserve Bank Governor Michele Bullock and senior figures in Australia’s banking industry on Wednesday in a bid to find a solution to the problems of the company.
The Transport Workers Union, which represents about 700 Armaguard workers, called on the company’s customers to find a solution.
National secretary Michael Kaine said workers needed certainty.
“The (union) is holding talks with Armaguard to protect workers,” Mr Kaine said.
Linfox has been contacted for comment.