The boss of Australia's biggest cash transporter is downplaying threats of a major collapse that would leave residents, retailers, and banks without money. Armaguard has had a rocky few years and is now being kept alive by its biggest stakeholders.
It secured an 11th hour $50 million deal mid-last year to stay afloat, and that was renewed in July for six months at a $25 million cost, but questions remain about what the long-term strategy will be.
Peter Fox, the executive chairman of Linfox, Armaguard's parent company, insists there is a plan with the current deal due to expire by the end of December.
"My family will be here standing until the last dollar of decimal currency is delivered in Australia. We're not going anywhere," he told The Australian Financial Review.
"We've come a long way from where we were, that's for sure, and we want to get this resolved. We just need to push the last bit over the line."
The combined $75 million deal came from Armaguard's biggest clients and the sectors that relied on cash the most.
The group included Commonwealth Bank, ANZ, NAB, Westpac, Coles, Woolworths, Wesfarmers (which includes the likes of Bunnings, Kmart and Big W), and Australia Post.
Price pressures have mounted on the cash-in-transit company, which is responsible for moving 90 per cent of Australian money around the country, as Aussies continue to use less physical currency.
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New pricing deal struck to keep Armaguard alive
Earlier this month, Armaguard and Linfox struck a pricing deal created by Deloitte Access Economics with those large stakeholders.
"[It] would support the continued financial viability of cash distribution across Australia, especially in regional and remote areas," A Deloitte spokesperson said.
"All parties have worked together in good faith to achieve this milestone and will continue to work together to ensure the ongoing sustainability of cash-in-transit services."
The new utility-style model recognises that cash is an essential service and therefore must operate under a shared funding arrangement between those who rely and deal with physical money.
Other services like healthcare, electricity, and disability support have similar pricing models and are typically established by independent bodies.
While the Big Four banks and supermarkets are usually rivals with each other, they have been forced to collectively band together to ensure cash survives.