A cash handling and availability trial for rural communities is being launched by the Reserve Bank, which says it reflects the reality that rural people still depend on cash.
The RBNZ is seeking interest from towns wanting to trial either local cash depots with automated cash banking facilities that work with all banks, or a security van courier service.
“Retailers and their customers are frustrated by cash banking difficulties, especially in rural New Zealand,” said Ian Woolford, the Reserve Bank’s director of money and cash.
A two-yearly bank survey on cash use and payments preferences released recently confirms a continuing decline in New Zealanders’ use of cash for everyday purposes.
The survey revealed the everyday use of cash fell to 57.2% in 2023, down from 60.4% in 2021 and 95.8% in 2019.
Woolford said those living in rural areas find it harder to access cash withdrawals and deposits than those living in urban areas.
“Overall, the top reason given by respondents for difficulty accessing cash services was that there was no ATM or bank branch in their area. This reinforces the rationale for the trials,” he said.
The bank has so far received nearly 80 expressions of interest from rural towns, where three systems will be trialled to provide communities with access to cash.
The bank is still seeking towns to participate in the trial, but they must have populations between 1000 and 10,000 and to have lost most or all cash banking services.
One system to be trialled is the installation of a local cash depot or a smart ATM that allows cash deposits and withdrawals.
A second option is the installation of a smart safe, a secure unit that allows the storage of prearranged cash for banking and for retailer cash floats.
The third option is for a regular secure service to deliver and pick up pre-ordered cash for rural retailers.
“New Zealanders still value the option of using cash, and we want to see if better local cash infrastructure, and supporting retailers to readily offer cash-outs, will help keep the option available,” Woolford said.
Alongside the trials, he said the bank is working to define a reasonable level of cash access that New Zealanders can expect, and ways to ensure that level of access is met.
To accommodate that, the RBNZ is considering paying rural retailers for allowing customers to withdraw a reasonable amount of cash without requiring an associated purchase of goods.
The trial is being driven by the RBNZ but it is also working with cash service providers such as ATM operators and services, back office cash handlers and entities involved in transporting cash.
Applications to participate close on June 7 with towns shortlisted and cash service suppliers finalised by August.
The 18-month trial for qualifying towns begins between September 2024 and February 2025 and will end in early 2026 with results expected in the middle of that year.
