New Zealand Reserve Bank Weighs Mandating Cash Services, Trials Rural ATM

As banks close branches, New Zealand’s central bank is considering ways to ensure cash remains accessible, including providing it directly.

The ATM and change machine installed in the small New Zealand town of Waipukurau by New Zealand's central bank. Courtesy of Reserve Bank of New Zealand

New Zealand’s central bank is considering requiring commercial banks to provide basic cash services nationwide, as it launches a public consultation on how to ensure continued access to physical money.

The Reserve Bank of New Zealand (RBNZ) says people in rural towns with populations between 200 and 999 should not need to drive more than 15 kilometres one way to access cash services. Those in more remote areas should nto need to travel more than 30 kilometres.

Under the proposal, banks would be required to provide a minimum level of cash services so that people, businesses, and community groups can withdraw and deposit cash and obtain change free of charge within those catchment areas.

Trial Underway in Rural Town

While consultation continues, the Bank has been trialling its own cash service in Waipukurau, a farming hub with a population of 4,698 at the 2023 Census.

It has installed a black, unbranded automatic teller machine (ATM) alongside a change machine. Businesses and community groups can apply to use the “cash depot” to withdraw money or exchange notes for smaller denominations or coins.

The trial will initially run for 12 months to help the Bank assess what works well, what could be improved, and whether direct intervention is necessary.

Banks ‘Must Provide’ Cash Access

Ian Woolford, RBNZ’s Director of Money and Cash, said the public expects banks to provide cash services to customers as part of basic banking services.

“People put money into their bank accounts and expect to be able to convert it easily, quickly and free, into cash and vice versa,” he explained.

“The public expect banks to provide cash services to them, but banks have been steadily reducing points of access ... especially in rural areas. We want this to change.”

The Bank estimates that maintaining appropriate cash services would deliver benefits to New Zealand worth $2.83 billion per year, at an additional annual cost to banks of around $104 million.

That cost, Woolford noted, is negligible compared with the banking sector’s combined annual pre-tax profits of more than $10 billion.