What is the new law?
The Irish government has proposed a new law that would require banks to reinstall ATMs in areas where they have been removed or reduced. The law aims to ensure that all citizens have access to cash, especially in rural and remote areas where digital payments are not widely available or accepted. The law is part of a broader strategy to protect the future of cash in Ireland, as the use of cash has declined significantly in recent years due to the Covid-19 pandemic and the rise of online and contactless payments.
The new law would also empower the Central Bank of Ireland to designate certain areas as “cash access zones”, where banks would have to provide adequate ATM services or face penalties. The Central Bank would also monitor the availability and affordability of cash services across the country and report to the government annually. The law would also establish a Cash Industry Forum, where representatives from the government, the Central Bank, the banking sector, the retail sector, and consumer groups would discuss and coordinate on issues related to cash.
Why is the law needed?
The new law is needed because many people in Ireland still rely on cash for their daily transactions and financial inclusion. According to a survey conducted by the Central Bank in 2020, cash was the most commonly used payment method in Ireland, accounting for 46% of all transactions. However, the survey also found that the use of cash had dropped by 14 percentage points since 2019, mainly due to the Covid-19 pandemic and the public health guidelines that encouraged people to use digital payments instead.
The decline in cash usage has also led to the closure or reduction of many ATMs across the country, especially in rural and remote areas. According to the Irish Banking and Payments Federation, the number of ATMs in Ireland decreased by 6% between 2019 and 2020, from 3,099 to 2,923. The number of ATM withdrawals also fell by 28% in the same period, from 131 million to 94 million. Many people, especially the elderly, the low-income, and the vulnerable, have faced difficulties in accessing cash and paying for essential goods and services.
The new law is intended to address these challenges and ensure that cash remains a viable and accessible option for all citizens. The government has said that the law is not intended to force people to use cash, but to provide them with a choice and a backup in case of emergencies or disruptions in digital payments. The government has also said that the law is in line with the European Commission’s proposal for a regulation on a digital euro, which would complement cash and not replace it.
How will the law affect the banks and the consumers?
The new law will have implications for both the banks and the consumers. For the banks, the law will mean that they will have to invest more in maintaining and operating their ATM networks, especially in areas where they have withdrawn or reduced their services. The banks will also have to comply with the Central Bank’s regulations and reporting requirements on cash services. The banks may face fines or sanctions if they fail to provide adequate ATM services in designated cash access zones.
For the consumers, the law will mean that they will have more options and convenience in accessing cash, especially in rural and remote areas. The consumers will also benefit from the Central Bank’s oversight and protection of cash services, which will ensure that the ATMs are safe, reliable, and affordable. The consumers will also have a voice in the Cash Industry Forum, where they can raise their concerns and suggestions on cash issues.
The new law is expected to be enacted by the end of 2023, after consultation with the stakeholders and approval by the parliament. The government has said that the law will be reviewed and updated regularly, in line with the changing trends and needs of the society.
