Banks suffer setback over cash delivery negotiation hopes

Thursday, 13 November 2025

Banks are seeking permission from the Commerce Commission to collectively negotiate for cash delivery services from Armourguard, which has a monopoly on the service after merging last year with its largest rival.

The Commerce Commission says banks cannot yet collectively negotiate for a joint contract with Evergreen International (Armourguard) to have cash delivered to and collected from their branches.

The Banking Association had asked the commission to give interim authorisation for the banks and other parties including major retailers to collectively negotiate over what it called “cash-in-transit” services.

These include the transport, management and processing of bulk cash for banks, the public sector, financial institutions and retail customers, as well as the replenishment of ATMs and bulk cash storage and management.

Interim authorisation for this move has been denied, but the commission is continuing to consider allowing collective negotiations to take place.

The commission said its decision not to issue an interim authorisation should not be taken to indicate that it would or would not grant the full authorisation banks want.

The Banking Association, which is an industry lobbying body for banks, said the interim authorisation was to allow negotiations for extensions to existing cash delivery and collection services from Armourguard.

They also wanted the interim authorisation to undertake preparatory work in anticipation of collective bargaining with Armourguard for new agreements.

Armourguard’s parent company Evergreen NZ Holdings was allowed to buy competitor ACM New Zealand, which was trading as Linfox Armaguard, in 2024, on the basis that it was very likely that one of two would cease to operate if the deal was not allowed to go ahead.

That created an effective monopoly for cash-in-transit services.

With cash use continuing to decline, banks are looking for ways of keeping the costs of moving cash around down.

It has said collective negotiation would result in significant benefits for the public, including reduced transaction costs, enhanced financial inclusion, and resilience.

It’s an issue the Reserve Bank Te Pūtea Matua is also keenly aware of, and is running a Future of Cash project based on its desire to keep cash circulating, and avoiding cash deserts from appearing in rural areas.

The Reserve Bank is also considering introducing a digital form of cash.

Armourguard stocks the country’s ATMs with cash.

The commission issued a statement that said two of the three commissioners who considered the interim application from the Banking Association were not satisfied that it was appropriate to grant interim authorisation.

They were commission chair John Small and commissioner Bryan Chapple.

“All commissioners agreed that this was a finely balanced decision. However, on the information provided the majority of commissioners are not satisfied that the potential benefits of permitting collective bargaining would outweigh the potential detriments” Small said.

“Ultimately, the majority of commissioners were not satisfied that the potential benefits outweighed the potential detriment that may result from the arrangement, so we have declined interim authorisation,” Small said.

Associate commissioner Nathan Strong dissented on the decision.

“Commissioner Strong’s dissenting view is that granting interim authorisation and allowing the participants to begin collective negotiations would preserve the potential for the benefits of collective negotiation to be realised should the Commission grant full authorisation, and that this outweighed the potential detriments of interim authorisation,” his dissenting opinion said.