The Minister for Finance, Michael McGrath TD, published the General Scheme of the Access to Cash Bill last month following approval by Government at Cabinet level. The Access to Cash Bill stems from a recommendation made by the Retail Banking Review, published in November 2022.
The Review highlighted the continuing importance of cash in ensuring that people do not experience financial exclusion, that consumers can budget efficiently, and that there is a safety net in the event of electronic banking, or the payments infrastructure being impacted by outages or cyber-attacks.
Figures show that in 2019 just under 20 billion was withdrawn from ATMs across the State. The total for 2022 was about 13.5 billion, a decline of almost a third. The trend is welcome news for the State’s banks, for whom the handling, transportation and management of cash is a high-cost, low-yield activity. For years they have encouraged customers to shift to online and mobile banking, while closing branches across the State.
The bill will require the three main retail banks to comply with regional criteria that set the minimum numbers of ATMs per 100,000 people, and the proportion within 10km of an ATM and a cash service point. It will initially aim to preserve infrastructure at December 2022 levels, accounting for the exit of KBC and Ulster Bank.
Other provisions will provide the Central Bank with regulation-making powers in relation to matters such as reporting, setting service standards, and other matters such as denomination stocking. The Central Bank will also gain powers to protect the resilience of the cash system, including the authorisation and supervision of cash-in-transit firms in respect of their cash handling activities and related financial services.
Despite the convenience of the cashless economy, not everyone is a winner. Older people and those on lower incomes tend to be more reliant on traditional money. Difficulties in accessing cash can exacerbate social isolation and marginalisation among those groups. Rural communities are vulnerable to the depletion of social infrastructure due to branch closures.
Minister McGrath commented, “The move to a more digitalised banking model, along with the costs involved in handling cash, have incentivised the traditional banks to move away from cash. Although cash usage has declined in recent years, and this decline accelerated during the pandemic, it is important to protect its role in our society and economy in the future. It is also very important that future changes are managed in a controlled, fair, and transparent manner. In the absence of a legislative intervention, it is likely that over time we would see more and more ATMs removed from communities across the country and I do not want to see this happen.”
The legislation allows the Minister to set minimum requirements for provision of these services. Responsibility will rest primarily with the three banks and significant penalties are promised if they fail to comply.
It also comes as the Department of Finance is in the process of developing a national payments strategy that will look at the acceptance of cash in the payments system.
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