Experts say cash and coins still have their place in people's wallets despite the banking world being more technologically and digitally-driven.
The future of cash will be the subject of an upcoming Reserve Bank event hosted by the Tauranga Chamber of Commerce, in light of the Bank's concerns that someNew Zealanders, already left out of the banking or digital worlds, will be severely disadvantaged if society veers toward having less cash.
In a report released on the topic on June 19, Reserve Bank Governor Adrian Orr said: "We see these issues as being about less cash, and not becoming cashless."
"There's the real possibility of a contraction in the cash system which could end up affecting lives.
"We think New Zealand should be making conscious decisions about the future of cash so that we can be prepared for future innovations, and ensure that sectors of society are not unfairly disadvantaged because cash falls out of favour."
Tauranga Chamber of Commerce chief executive Matt Cowley. Photo / File
Tauranga Chamber of Commerce chief executive Matt Cowley said there were pros and cons to phasing out cash.
He said consumers carried less cash now, but electronic payment fees were expensive for businesses to absorb, and customers do not want to cover this cost either.
A resurgence of local markets in Tauranga, where transactions were mainly done by cash, was an example of how businesses and consumers were still reliant on cash, he said.
"Our retail sector is also reliant on the international tourist market where they prefer to use cash for small purchases and avoid expensive credit card fees," he said.
Cash also allowed people to lend their young children money for school or sports trips away without giving out their card.
He said many adults, let alone young people, had poor financial literacy and having cash could make a transaction more tangible and prevent people from slipping into trouble.
"There is something tangible about cash that makes people understand the true value of money," he said.
"Moving to a cashless society will require a reform of education programmes and support services for both adults and young people."
Tauranga and Western Bay Grey Power president Jennifer Custins. Photo / File
Jennifer Custins, president of Tauranga and Western Bay Grey Power, said a person's upbringing mainly influenced whether they used cash or Eftpos.
She said some older people used a card instead of cash as it was easier to manage, but others preferred cash.
She said if the demand for cash was declining, such as that with cheques, it would become unviable.
At the same time, if cash was to be phased out, she thought it would be done over a long period of time.
Tauranga Budget Advice Service manager Shirley McCombe. Photo / File
Tauranga Budget Advice Service manager Shirley McCombe said people who used cash tended to be older.
For others, having cash could be an excellent visual representation of what they have saved and help them stay within their budget.
"It is easy for people to use electronic forms of payment – sometimes too easy," she said.
A BNZ spokesperson said more than 90 per cent of the bank's transactions were done online.
The spokesperson said cash still played an important role in New Zealand, with BNZ research released earlier in the year showing people still carry around $60 cash on average.
The spokesperson said this research also showed a generational gap, with younger people carrying and using cash less than older people.
An ASB spokesperson said cash continues to be a major payment option for many customers and this was likely to continue into the future.
A Westpac spokesperson said a "significant proportion" of customers still use cash, but Eftpos and other card use was increasing while cash withdrawals from ATMs were declining.
"Some businesses are already cashless, for example, retailers who only sell online. In the future, we are likely to see an increasing number of businesses try out a cashless approach, especially those who have customers from a receptive demographic."
The benefits of businesses being cashless included spending less time on bookkeeping, removing cash handling fees and one less security risk.
ANZ was also approached for comment, but a response was not received before deadline.
The Future for Cash in New Zealand What: A discussion around the future of cash in New Zealand Where: Tauranga Chamber of Commerce, Bay Central, 65 Chapel St, Tauranga When: Friday, 7.30am to 9am Go to the Tauranga Chamber of Commerce website for more information.
