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Ireland Legislates to Ensure Access to Cash

Categories : Cash facilitates budgetary control, Cash is a contingency and fall-back solution, Cash is available to all users, Cash is the first step of financial inclusion, Cash protects privacy and anonymity
February 8, 2024
Tags : Access to cash, Ireland, Regulators
The Irish government has approved the Access to Cash Bill which aims at guaranteeing reasonable access to cash, both in terms of withdrawals and lodgements, and ensuring central bank oversight over cash cycle stakeholders.
Guillaume Lepecq

Chair, CashEssentials

On 23 January, the Access to Cash Bill was approved by the Irish government. The objectives of the Bill are :

The Access to Cash Bill is based on recommendations made by the Retail Banking Review, published in November 2022, by the Department of Finance. In July of the same year, AIB the state-owned Irish bank provoked outcry from the public, merchants and politicians when it announced it would remove cash services from a third of its branches. AIB reversed the decision in a matter of days.

Protecting the Role of Cash in the Economy

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.

Finance Minister Michael 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.”

“We have to ensure that people are not left behind and we must avoid the risk of financial exclusion. We must recognise the important role that cash continues to play in all our lives, and this is a role I am determined to protect.” said McGrath.

Preserving the Cash Infrastructure

The Access to Cash Bill ensures that the cash infrastructure is preserved at December 2022 levels initially, i.e. 4,189 ATMs or 81 ATMs per 100,000 people.

The Bill requires compliance 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. Responsibility for compliance rests with the designated entities who will be the three main retail banks in the first instance.

“In addition to protecting ATM availability, it is important that they are properly maintained and that the ‘out of service’ experience of consumers is kept to a minimum. Therefore, this Bill provides the Central Bank with regulation making powers in relation to matters such as reporting, setting service standards, and other matters such as denomination stocking.” said McGrath.

Mandatory Acceptance of Cash?

The issue of mandatory acceptance of cash is not included in the bill, but it is covered by the National Payment Strategy, which is currently being developed by the Finance Department. A public consultation is currently being undertaken and is due to close on 14 February: National Payments Strategy: Public Consultation.

It is also included in the European Commission proposed regulation on legal tender, which defines

legal tender as entailing mandatory acceptance, at full face value, with the power to discharge from a payment obligation.

Oversight of the Cash Cycle

The Review also called on Department officials to require ATM operators to be authorised and supervised by the Central Bank and to provide the Central Bank with responsibility and 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.

The General Scheme incorporates both of these elements in one piece of legislation. The legislation will for the first time regulate ATMs with the objective of improving operational standards and ensure good customer service.

In order to draft the General Scheme, the Department has engaged with the Central Bank and key players in the cash system in order to establish what the appropriate levels of access to cash are to ensure that any further evolution of the cash infrastructure will be managed in a fair, orderly, transparent and equitable manner for all stakeholders.