The debate of whether we were entering a cashless society era was brewing.
A decade later, the discussion continues.
For years, more stores have no longer accepted cash as payment, and it’s easy to see why, with 94% of transactions in 2024 being digital. They’re also not obligated to either.
In New Zealand, there are no rules to protect cash. If a business doesn’t want to accept it, they don’t have to.
In 2023, the Reserve Bank of New Zealand found that cash usage for everyday purchases had decreased from 95.8% in 2019 to 57.2% that year.
Apparently, just 8% of New Zealanders were regular or daily cash users.
But today, the Reserve Bank opened public consultation on a proposal that would force banks to set up hundreds, if not thousands, of additional ATMs and branches to make sure people have access to cash.
NZ Herald Wellington business editor, Jenée Tibshraeny, told The Front Page that the proposal suggests banks should be required to ensure free-to-use cash services were within walking distance in urban areas and driving distance in rural areas, in most cases.
“The Reserve Bank has worried that over the past decade, about 40% of bank branches have closed. It’s concerned that people don’t have easy enough access to services that help them trade in cash,” she said.
The Reserve Bank has said that if banks opted to set up multi-bank, full-service cash sites, they would need to create 1288 of these.
Currently, there are five nationwide.
If banks met the standard by only working alone, they would need to more than double the number of ATMs and branches they have.
There are currently 2159 bank-owned sites offering partial cash services. That’d need to grow to 3013 branches or ATMs.
Director of money and cash, Ian Woolford, estimated that the benefits of this proposal would “far outweigh the costs”.
“Giving the public an appropriate level of cash services provides benefits to New Zealand of $2.83 billion per annum, at an additional annual cost to banks of around $104 million.
“This cost is negligible when compared to the more than $10 billion annual pre-tax profits earned together by the banking sector,” he said.
Public consultation on this cash services standard is open for six weeks, closing Friday April 10.
Listen to the full episode to hear more about:
- The value of cash
- Generational divides
- Digital cash and payments modernisation
- Where to next?
The Front Page is a daily news podcast from the New Zealand Herald, available to listen to every weekday from 5. The podcast is presented by Chelsea Daniels, an Auckland-based journalist with a background in world news and crime/justice reporting who joined NZME in 2016.
You can follow the podcast at iHeartRadio, Apple Podcasts, Spotify or wherever you get your podcasts.
