Cashless wake-up call? Reserve Bank urges keeping cash for emergencies amid CrowdStrike outage fallout

• Last Friday, a CrowdStrike software glitch disrupted services across banks, media, and airlines.
• The Reserve Bank and National Emergency Management Agency advise keeping cash for emergencies.
• Cash circulation reached over $8 billion in 2024, nearly double that of 2014.

New Zealand’s central bank recommends people have cash on hand after many in the country were unable to pay for petrol, groceries and other necessities during a global computer system failure last week.

The Citizens Advice Bureau (CAB) also says physical cash is an “essential backstop” for emergencies - but the advocacy group is concerned it is increasingly harder to get cash and some businesses are no longer accepting it.

Last Friday evening, several banks, telecommunications companies, media outlets and airlines were affected by a glitch in a software update which saw their computer systems crash. Kiwis reported long queues at supermarkets, television channels going off-air and trouble accessing online and mobile banking services.

Payment systems including Visa payWave and ANZ Tap n Go reportedly went down. The issue was with security software written by Texas-based company CrowdStrike. Microsoft estimated some 8.5 million computers were disabled by the glitch.

One Auckland-based technology expert said billions of dollars of productivity and commerce would have been lost during this time. Gorilla Technology chief executive Paul Spain said the widespread nature of the issue brought the world to a halt.

The CAB said the incident highlighted “just how vulnerable our systems are when a routine software update can compromise payment systems across the globe”.

“Cash continues to be a vital and necessary tool for supporting inclusion of all people in society, and for community resilience in times of emergency,” the CAB said.

A spokesman for the Reserve Bank of New Zealand (RBNZ) said: “The Reserve Bank and National Emergency Management Agency recommend having cash on hand for emergencies - ideally in coins and smaller denominations.”

The CAB said, however, “it is increasingly hard to access cash when you need it, especially if you want to make a withdrawal from your bank account”.

There was more than $8 billion worth of coins and banknotes in the public’s hands in 2024, more than double that of a decade ago. Photo / Dean Purcell

Some banks had stopped dealing with cash and others were charging customers for using it, the CAB said. The CAB was also alarmed about the growing number of businesses no longer accepting cash or charging people extra for using it.

“This is an area of concern for us, as our law currently provides no protections around cash acceptance, except in relation to paying a debt. Government agencies, utilities providers and retail stores are increasingly telling people they have to pay online, but we know this doesn’t work for everyone,” the CAB said.

“To ensure cash remains a viable option... we also need government and businesses that provide essential goods to commit to accepting cash payments.”

Reserve Bank’s digital cash plan would not replace physical banknotes and coins

Earlier on Friday, the RBNZ explained to the Herald why it wanted a digital currency. A spokesman for the RNBZ later explained this would not replace physical cash and confirmed the bank had no plans to phase out physical coins or banknotes.

The RBNZ’s spokesman said: “Digital cash would be designed to be as resilient as possible in times of disruption.

“While it would be designed to work offline, it would not replace physical cash, but would instead exist alongside it as another choice for individuals.

Cash is increasingly going out of favour for some businesses, but after many Kiwis found themselves unable to pay for necessities during a global computer crash, the Reserve Bank is suggesting people keep cash for emergencies. Photo / Dean Purcell

“In a world where the nature of disruptions can be hard to anticipate, having more ways to transact in times of crisis helps ensure that individuals can continue to make payments,” he said.

The CAB said it supported the RBNZ’s position on the importance of cash: “We know the Reserve Bank is looking into digital cash, but we are pleased that they recognise that this is about providing people with another option and would not replace physical cash.

“The barriers some people face in using online systems will also be barriers to using digital (electronic) cash - for example, because they don’t have a reliable device or they lack trust and confidence in technology - so it’s really important that physical cash is still an available option for people,” the CAB said.

Amount of cash circulating in public on the rise

While the CAB pointed to growing restrictions on the use of cash, data from the RBNZ showed the amount of cash circulating in the public had increased to the highest level in history.

There was more than $8 billion worth of coins and banknotes in the public’s hands in 2024. That was almost double the total value of cash compared to a decade ago when $4b worth of cash was circulating in 2014.

Raphael Franks is an Auckland-based reporter who covers breaking news. He joined the Herald as a Te Rito cadet in 2022.