Reserve Bank Surveys Kiwis on Cash Use as System Redesign Begins

The Reserve Bank of New Zealand is conducting a nationwide survey to gather insights on how individuals use and store cash. This initiative aims to collect more up-to-date information as the bank prepares to redesign its cash system. The postal survey, which will now occur annually instead of biennially, seeks to understand payment preferences, the frequency of cash usage, and the challenges faced when handling cash.

The central bank has introduced new questions this year, focusing on whether individuals experience difficulties in using cash. According to Ian Woolford, the Reserve Bank’s director of money and cash, “As the steward of money and cash for New Zealand, we need to ensure that New Zealanders can access, use, and bank cash.” The findings from the survey will play a crucial role in informing the bank’s redesign efforts.

Declining Cash Usage and Its Implications

The use of cash has been steadily declining in New Zealand, with Carolyn Young, chief executive of Retail New Zealand, noting that it now represents less than 10 percent of transactions. While some consumers rarely use cash, Young highlighted its critical importance in specific contexts. “In rural areas versus urban areas, there is more cash that goes through transactions,” she explained.

Young emphasized that cash is particularly beneficial for individuals on tight budgets, as it serves as an effective tool for managing finances. Furthermore, in emergency situations—such as power outages or failures in electronic payment systems—cash becomes indispensable. She pointed out that hospitality businesses are more likely to stop accepting cash compared to retailers.

The Reserve Bank maintains that while businesses are not obligated to accept cash, they must provide alternative payment methods for customers who cannot pay by card. New Zealand First has proposed a members’ bill to protect cash transactions, mandating that stores must accept cash for purchases up to $500. Young acknowledged the importance of cash but noted that retailers are generally opposed to making it compulsory due to concerns over robbery risks and the prevalence of counterfeit notes.

Survey Participation and Verification

The Reserve Bank’s survey will remain open until October 10, 2023. Individuals who receive a letter inviting them to participate can verify its authenticity by visiting the Reserve Bank’s website, emailing [email protected], or calling +64 4 472 2029.

By collecting this crucial data, the Reserve Bank aims to ensure that cash remains a viable and accessible option for all New Zealanders, adapting to the evolving landscape of payment methods.