The Reserve Bank wants all those who need it to be able to access cash.
And it's proposing as part of its 'Keeping Cash Local' initiative, a 'cash services standard' that it has opened for public consultation. Essentially the RBNZ's looking at a number of 'cash sites' evenly distributed around the country that would allow the withdrawal, deposit and exchange of cash.
It reckons this would cost banks around $104 million a year to run.
A key part of this is that the services be offered free of charge - IE you won't face fees for withdrawing your money. The consultation runs from February 25 to April 10.
The background to this is banks' gradual removal of services, particularly from rural areas and associated rising levels of difficulty for people in accessing cash.
RBNZ's director of money and cash Ian Woolford says the public expect banks to provide cash services to them, "but banks have been steadily reducing points of access for their customers to get cash, bank cash or get change, especially in rural areas".
"We want this to change, and we are open as to how. This consultation proposes one way to make this happen."
The RBNZ is suggesting a minimum 1,293 cash sites that would enable the withdrawal, deposit and changing of money. At this stage it is assuming the banks would work together to provide these sites as multi-bank facilities, but is comfortable with the idea that some of the banks might want to operate just their own facilities - but if so this would mean the total number of sites being offered would be more than 1,293.
The RBNZ says right now, across New Zealand, there are only five multi-bank, full-service cash sites, and even these are not truly ‘multi-bank’ as only customers of ANZ, ASB, BNZ, Kiwibank, TSB, and Westpac can use them. These are the five NZ Banking Association ‘regional banking hubs’ located in Martinborough, Ōpōtiki, Twizel, Waimate and Whangamatā. The remaining cash service sites available currently across New Zealand are partial service sites – they may dispense cash but not accept deposits or allow cash swapping, or they may do all these things but only be accessible to account holders at the bank providing the service.
A walkable walk for cash
Under the terms of the RBNZ proposal, the RBNZ says the cash sites should be of 'walkable' distances for customers in urban areas and 'reasonable driving distance' for those in rural locations.
It defines 'walkable' as three kilometres, one-way, while 'reasonable driving distance’ refers to no more than a 15 kilometre one-way journey for people living in rural settlements and no more than a 30 kilometre one-way journey for people living remotely.
The most recent bank-wide data the RBNZ has is from 2024 and it suggests the banking sector currently owns 2,159 cash service sites across New Zealand. Of these, 616 are bank branches and 1,543 are ATMs, but many of these facilities are 'partial service' sites.
Under the terms of its proposal the RBNZ says customers should not be charged fees for using the services.
Additionally, there must be enough cash service sites across New Zealand to prevent lengthy queues. This means there must be at least 2.5 multi-bank, full-service cash sites per 10,000 people.
The RBNZ says its proposal would cost the banks collectively about $104 million a year.
Woolford believes the cost is "negligible, when compared to the more than $10 billion annual pre-tax profits earned together by the banking sector".
Do New Zealanders agree?
The RBNZ says people should not have to face unreasonable wait times either and cash services should be free of charge. "We want to know if New Zealanders agree with how we are approaching this".
“We believe banks must provide cash services to customers, free-of-charge, because cash is an essential part of a customer’s relationship with their bank," Woolford says.
"People put money into their bank accounts and expect to be able to convert it easily, quickly and free, into cash and vice versa."
The RBNZ has put a tremendous amount of work and research into accessing of and usage of cash in recent years.
And a great deal of work has gone into developing the new proposal - including detailed requirements for what would be needed in each region of the country.
“District maps show what this proposal could mean for each of the 66 territorial authorities (excluding the Chatham Islands). It assumes banks share cash infrastructure, as they already do at the five remaining New Zealand Bankers’ Association regional banking hubs," Woolford says.
The RBNZ says many countries have or are introducing similar new laws to ensure adequate access to cash services, including the UK, Ireland, and the Netherlands.
“Cash benefits society, as it is used for economic, social and cultural reasons, and as the steward of cash we are focussed on ensuring the cash system is healthy and available,” Woolford says.
Who is affected?
The RBNZ says research shows 72% of small businesses would be adversely affected if cash was unavailable as a means of payment.
"Our own survey tells us that over 80% of adults use cash sometimes, over half (56%) store cash and 8% rely on cash as their sole means of payment."
The ‘keeping cash local’ policy proposal outlined here is the first step in the Reserve Bank’s policy programme aimed at introducing the necessary policy interventions required to maintain cash as a meaningful payments option for New Zealanders.
The RBNZ's not given any intended timeframe for implementation of these proposals.
It says that after this public consultation concludes, it will consult again, focusing on what banks the standard applies to, and the detailed design and implementation options for all aspects of a minimum cash service standard.
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