The Government has launched a consultation period for a new National Payments Strategy which will seek, among other things, to look at protecting the use of cash in the economy.
The Covid pandemic caused a rapid decrease in the use of cash and it seems many Irish consumers got used to paying by card and phone as contactless, chip and pin, and mobile payments have increased hugely in popularity over the past few years.
But at the same time, the move towards a ‘cashless society' has caused concern to many. Especially those of an older generation who may not feel comfortable with online banking and who are more used to paying with notes and coins.
That's why the Government has launched a consultation period for a new National Payments Strategy (NPS) which will look at things such as the role of cash, instant payments, crypto payments as well as examining fraud.
In conjunction with this, the Government is working on legislation under the Access to Cash bill which aims to protect the role of cash in the Irish economy.
The bill, which is currently being finalised by Finance Minister Michael McGrath, has three broad objectives.
1. Ensure easy access to ATMs
Banks have been drastically culling their branch networks in recent years. And on top of this we’ve seen several banks such as KBC, Ulster Bank and before them Halifax/Bank of Scotland exit the market, which hasn't helped. As when banks close branches, they almost always close the adjoining ATM, meaning some residents in rural communities now have to travel miles if they want to withdraw money.
The bill will make it a requirement for banks and ATM operators to provide at least one ATM service in towns and villages of a certain size.
2. Ensure essential services accept cash
Currently a business can legally refuse to accept cash as a means of payment as long as it clearly displays its policy to customers.
However there’s been unease at this policy given the increasing number of businesses that no longer accept cash. And the issue received widespread national attention in August when NCT operator Applus+ said it would no longer accept cash. Many motorists were left fuming at the move, so much so that the Government had to step in and reverse the decision.
Under the bill, certain essential services (such as supermarkets, pharmacies and Government services like hospitals and the NCT) will be obliged to accept cash.
3. Regulate ATM operators
In recent years the country’s main banks have sold off a huge chunk of their ATM network, meaning over 75% of the country’s ATMs are now managed by independent, largely foreign operators. But these operators are not regulated by the Central Bank and are largely free to charge and do whatever they like for the use of their ATMs.
The bill will require ATM operators to be regulated by the Central Bank of Ireland.
Is cash dead?
In recent years card payments have overtaken cash when it comes to paying.
According to the Banking and Payments Federation Ireland, in the second quarter of this year, almost seven million debit and credit card payments were made every day in Ireland. Of this, around 4.5 million were made in person - either by contactless, chip and pin, or mobile.
On the contrary, only around 250,000 ATM withdrawals were made each day.
So clearly people prefer to pay with card but that doesn't mean people want to fully part with cash just yet. And there is a sizeable portion of the population, especially those aged over 65, who use cash on an almost daily basis. And even among those who rarely use cash, many still want to keep the option of paying with it.
Many are also concerned that those in disadvantaged communities, the homeless, or refugees will struggle in a cashless society as they may find it difficult to open a bank account and therefore may not have access to payment services. However it should be noted that under EU legislation all banks must provide people with access to a basic bank account.
Pros and cons
Many people prefer the convenience of cards, as well as the safety element, as you're not carrying around wads of notes on you.
And for governments there is less room for tax evasion, which benefits us all. It's also far more difficult to launder the proceeds of crime when you can't use cash.
But it can be easier to overspend - if you’re handing over three, crisp €50 notes for a new jacket, let’s say, you’ll think a bit longer than if you were tapping your card!
Card payments can also exclude certain vulnerable groups and it’s important this not occur. Age Action has reported that 65% of people over the age of 65 experience digital exclusion, which has an impact on their ability to access online banking or contactless payments. This means they are more reliant on cash.
If you have strong feelings either way on the use of cash in the economy you can give your feedback on the new NPS here.
And of course let us know what you think in the comments below or over on our social media channels.
