Paying scrap sellers without cash: PayID, bank transfer and cheque

Why scrap yards have moved off cash

Cash for scrap was the norm for a long time, and it’s why scrap was an easy way to turn stolen metal into money with no trail. Some states have closed that off by law — the next section lists which ones — and yards everywhere else have been moving off cash anyway.

Tax is the other half of it. The ATO’s scrap metal code of compliance describes its no-ABN withholding rule as designed to stop sellers asking for cash to avoid their tax obligations, and the code includes a clause — currently frozen — that would require transactions over $300 to be paid by electronic funds transfer or by a cheque made out to a person or business, not cash.

Even where cash isn’t banned outright, the practical case is strong: no cash in the till to be robbed or miscounted, no trip to the bank, and every payment leaves a record you didn’t have to write.

Where cash is banned, state by state

These are the states we’ve confirmed from the regulator or the legislation itself, as at the date this guide was checked:

• New South Wales — banned. Dealers must not pay for scrap metal, or advertise that they will, with cash, a cheque payable to cash, or goods and services (Scrap Metal Industry Act 2016).
• Victoria — banned since May 2018. Payment has to be by electronic funds transfer or a cheque that isn’t transferable or payable to cash, and not e-currency such as bitcoin.
• South Australia — passed, not yet in force. The Scrap Metal Dealers Act 2025 bans cash, cheques payable to cash, cryptocurrency, prepaid cards and payment in goods or services, but it hadn’t come into operation when this guide was checked.

In the other states and territories we found no cash ban for scrap metal. That doesn’t mean anything goes — second-hand dealer laws still apply in most places, and the ATO’s rules apply everywhere. Wherever your yard is, these habits hold up:

• Check photo ID before you buy, and keep a copy against the seller’s record. It’s required in some states and good protection in all of them if stolen metal turns up.
• Pay electronically, into an account in the seller’s own name, so every payment leaves its own record.
• Record what you bought, its weight, the price, and how and when you paid — against the purchase, not in a separate book.
• Follow the ATO’s scrap metal rules for sellers without an ABN (a signed statement by the supplier, or 47% withholding). They’re federal, so they’re the same in every state.
• Issue RCTIs to GST-registered suppliers the same way in every state — RCTIs are an ATO arrangement, not a state one.

PayID vs bank transfer vs cheque

There are three practical ways to pay a seller without cash. Most yards use more than one.

• PayID — the seller gives you their mobile number, email address or ABN, which is linked to their bank account. Your banking shows you the name registered to that PayID before you confirm, so you can check it matches the person at the counter. It’s the quickest option for walk-ins: no BSB to read out, no digits to mistype.
• Bank transfer (BSB and account number) — the standard for regular suppliers and larger amounts, and the usual choice when you pay in a batch at the end of the day or week. The risk is the details: a wrong digit can send money to the wrong account, and a plain BSB and account number doesn’t show you a name the way PayID does.
• Cheque — still allowed in places if it’s made out to the seller and not to cash, but the Federal Government plans to wind down the cheque system by no later than 2030, and most sellers would rather have the money today. Treat cheques as the fallback.

Some yards also pay transfers by hand from their own internet banking rather than through their counter or office system. That works — it just means someone has to note the payment against the purchase afterwards, which is where things get missed.

Getting payment details right

Paying the wrong account is the expensive mistake in cashless buying, and getting money back from a stranger’s account is slow and uncertain. A few habits prevent most of it:

1. Take payment details from the seller, not from someone else on their behalf, and match the account name to the seller’s ID.
2. With PayID, read the name your banking shows back to the seller before you send. If it doesn’t match, stop.
3. For regular suppliers, collect bank details once, check them, and keep them on the supplier’s record — not on a sticky note or in an old text message.
4. Treat any request to change bank details as suspicious until proven otherwise. Confirm it by calling the supplier on a number you already have, not one in the email asking for the change. Changed-bank-details emails are a common scam on businesses that pay suppliers.
5. Have a second person check the first payment to a new account, and any payment to changed details.

Recording the payment against the purchase

Paying electronically only gives you a trail if you can connect each payment to the purchase it was for. Victoria, for example, requires dealers to keep a copy of the cheque or electronic funds transfer with the record of each scrap metal purchase. For each purchase, record:

• how it was paid — PayID, bank transfer, a manual transfer from your own banking, or cheque;
• the amount, and the date it was paid;
• a payment reference or cheque number;
• who paid it, if it isn’t the person who did the purchase;
• whether it’s paid yet, if you pay later in a batch.

Put the docket or purchase number in the payment reference. It costs nothing, and when a seller rings saying they weren’t paid, or your accountant finds a transfer with no explanation, the answer is one search away in your bank statement.

Then check it. At the end of each day or week, the total of purchases paid should equal what left the bank account by each method. If the totals don’t match, find out why that week — not at the end of the quarter.

How AltScrap handles it

Cash isn’t one of the ways to pay at the AltScrap counter. Every purchase records how the seller was paid — PayID, bank transfer, manual transfer or cheque — and the seller gets a receipt on their phone by email or SMS.

In the back office, the payout queue shows what’s paid and unpaid by store, method and status, and every payment stays attached to the purchase that created it. Suppliers who sign up online enter their own bank or PayID details, which have to be checked and confirmed before they can be paid to. The Payment Summary and Payment Compliance reports show how purchases were paid over any period, ready to export when someone asks.