The Council of Financial Regulators and the Australian Competition and Consumer Commission (ACCC) released a consultation paper as they mull a potential regulatory framework for cash distribution in Australia, according to a Wednesday statement.

The regulators said that the framework would focus on four policy principles: access, sustainability, resilience, and efficiency, and that it could include powers for them to enforce the framework and pursue penalties where appropriate.

Regulation of the cash distribution sector would require legislation, they added. The regulators proposed the establishment of a register of all entities providing cash distribution services, which would be subject to minimum reporting requirements. Under the framework, the regulators would have oversight powers to establish reporting obligations and monitor the entities.

A decline in the use of cash for payments put pressure on the cash distribution system and the economics of providing cash services across the country. Armaguard is the only provider of national-level cash distribution services after consolidation in the sector.

Maintaining cash as a "widely available and accepted means of payment" is in the public interest, the regulators said, and the government has committed to maintaining adequate access to cash.

The closing date for submissions regarding the consultation paper is Aug. 15.

Meanwhile, on Monday, major banks and retailers reached an agreement with Armaguard to extend their financial contribution for a further six months, with Armaguard receiving an extension of AU$25.5 million from July to December.

The banks and retailers include ANZ Group (ASX:ANZ, NZE:ANZ), Australia Post, Coles Group (ASX:COL), Commonwealth Bank of Australia (ASX:CBA), National Australia Bank (ASX:NAB), Wesfarmers (ASX:WES), Westpac Banking (ASX:WBC, NZE:WBC) and Woolworths Group (ASX:WOW).