Access to Cash legislation was approved by Government and published in January. The objective of the legislation is to ensure that Ireland has a framework in place to manage future changes to the level of cash infrastructure as demand for cash changes.
This legislation will ensure citizens have access to cash now and into the future by preserving the cash infrastructure at December 2022 levels, initially and reviewing the requirements at regular intervals thereafter.
This legislation will put a framework in place to enable us to manage future cash demand changes in a fair, orderly, transparent and equitable manner. At present, there is no legislative framework governing such changes and we are lucky to have the level of access we have today.
Between them, the retail banks hold around €137 billion of deposits from consumers and small traders and with the three retail banks responsible for the vast majority of household deposits, it is only logical that they should be ultimately responsible for maintaining cash infrastructure.
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An Post is part of the solution but it must be remembered that unlike the retail banks it doesn’t hold on to anyone’s cash, it simply acts as an agent for others, including the Stat
Flexibility exists within the proposed legislation to include other players in the future, including individual credit unions, should they achieve sufficient market share in the level of deposits and the number of current accounts.
This flexibility provides an avenue for additional players to be responsible for ensuring sufficient and effective access to cash and mitigates the danger of it being a barrier to entry for new players into the Irish market.
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An Post, which has an agency relationship with two of the three retail banks, helps provide banking services in a number of locations across the country, particularly where there is no longer a bank branch. This includes the ability to withdraw and lodge money into a bank account for a consumer or business.
While these agency relationships are a welcome development, An Post’s network of post offices is primarily there to serve its core functions, including providing a postal service, distributing social welfare payments and access to State Savings. An Post is part of the solution but it must be remembered that unlike the retail banks it doesn’t hold on to anyone’s cash, it simply acts as an agent for others, including the State.
Unlike An Post, credit unions do have household deposits but their near €16 billion is shared between 191 active credit unions, whereas the other €137 billion is shared between a small number of banks. Each of the 191 credit unions operates individually and under a common bond, unlike the three main retail banks (AIB, Bank of Ireland and PTSB).
In addition to maintaining the cash infrastructure at December 2022 levels, it is equally important that these facilities operate efficiently and in a manner that serves the citizen’s needs. There is little benefit in implementing a framework for access to cash if the machines don’t work.
How many times have you had to go to a number of ATMs to find one that works, or find that only large denominations of notes are available?
The availability of only large value notes in machines may be of annoyance or inconvenience to many but we must remember the person who may not have €50 in their current account and is waiting for pay-day at the end of the week or to receive their next social welfare payment.
It is important to remember that since 2020, the domestic banking system sold large parts of their ATM networks to third-party operators, resulting in the majority of the network being operated by independent ATM operators.
Hence, the legislation will require, for the first time, independent ATM operators to register with the Central Bank of Ireland. It will enable the Central Bank to impose requirements on ATM operators such as service standards, hours of operations, maximum downtimes and denomination stocking.
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During all stages of the preparation of the Access to Cash Bill, engagement with industry has been hugely important. This has included players involved in all parts of Ireland’s cash cycle, from the retail banks to independent ATM operators, cash-in-transit firms and other State actors including the Central Bank.
Unless Ireland experiences a major surge in the demand for cash, this legislation is unlikely to result in a requirement for large-scale additional infrastructure
The announcement by the Banking & Payment Federation of Ireland (BPFI) that it is fully supportive of “continued access to cash” and of “the other core purpose of the Act, which is to develop a framework to manage this access” is an important and extremely positive statement.
The BPFI is also highlighting concerns that its members will be facing “new and unquantifiable costs”, which “could ultimately increase the cost of everyday banking”.
Unless Ireland experiences a major surge in the demand for cash, this legislation is unlikely to result in a requirement for large-scale additional infrastructure.
My officials and I have been urging the BPFI and its members to explore ways to work together so that the future costs of compliance with the legislation is reduced. This is the model in many other countries including the UK, the Netherlands and Sweden.
To conclude, the level of cash usage in Ireland has been declining over the last decade with a corresponding rise in the use of card payments, and now more recently, increased use of mobile phones or smartwatches for payments. Despite this decline, there will be a continuing need and demand for cash into the future.
The Access to Cash Bill will ensure an appropriate framework is in place to ensure this need and demand is met in a fair, orderly, transparent and equitable manner as future levels of cash usage change.
Michael McGrath is the Minister for Finance
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