We will fund the trials, which will start next year (2024) in several communities. The trials will test new ways for people, including retailers, to withdraw and deposit cash, including change and takings, at little or no cost to them.
“We know that New Zealanders, particularly in rural areas, still often rely on cash and value the certainty and convenience it provides, including when electronic options aren’t available or are off-line as we saw for large parts of the country during Cyclone Gabrielle,” says Ian Woolford, Director of Money and Cash. “This research project recognises the important role of retailers in the cash system and will test ways of ensuring that cash remains easy to get, spend, give as change, and bank.
“We’ll be looking for 2 or 3 districts, ideally with a few communities with populations of less than 10,000 that have lost most or all bank-provided counter and cash services. We’ll work with these communities to confirm their cash servicing needs and what possible solutions to trial. We’ll also invite national stakeholder groups to take an interest and provide advice. The trials will run for about 18 months to inform our future work to support cash use and the cash system.
“Electronic payments generally add to retailer and customer costs, but banks’ withdrawal from offering suitable local cash services make it harder and more costly for retailers and customers to use cash. We want the cash system to remain resilient, and retailers and individuals to continue to enjoy its social and economic benefits.
“As well as ensuring cash remains available and easy to use, keeping it circulating within communities is more cost and time efficient for everyone, and it’s better for the environment due to lowered demand for cash-related freight or travel,” says Mr Woolford.
We will provide full details on how communities and interested stakeholders can apply to participate in the trials in early 2024 and are now welcoming interest from people and organisations who want to receive these.
Questions and answers
Community or national representatives from iwi, local government, business, or voluntary sector groups can register their interest online, and we’ll be back in touch about the application process in early 2024.
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Cash allows individuals and groups to trade easily and instantly with each other. It supports cultural customs such as koha, family, community, and business life.
We know that about 6% of the population rely on cash to live their lives, and these people tend to be among more vulnerable groups — for example, the young, elderly or disabled. They may not have a bank account or online access for a variety of reasons. People who rely on cash are also more likely to live rurally or be Māori.
Most of us want to have the option of paying in cash and do use it occasionally. We also know that it’s a great back-up option when power and data essential to digital payments are down, as seen during extreme weather events.
While there is a continuing trend away from cash towards digital payments for everyday transactions, we know that some of that is driven by provider incentives to pay digitally — for example, points programmes or disincentives to deal in cash — for example, removing cash services from branches, increased travelling time to remaining branches or ATMs, and reduced opening hours.
We know people value the option of using cash, even if they don’t use it very often. We want to explore how best to keep that option available. The trials enable us to explore new ways of providing cash services in a cost-effective way.
A central bank digital currency (CBDC) would be another form of central bank money to circulate alongside cash, and not a replacement for it. We want central bank money – whether cash or any future CBDC – to be widely available and accepted.
Central bank money provides a state-backed alternative to money held in commercial bank accounts which rely on the strength of the bank concerned.
Central bank money also provides a marker of value for the New Zealand dollar, helping make sense of prices, and what private money is worth and can be exchanged for.
We will be following typical public sector procurement processes where external support is needed for the researched trials. The method taken for each procurement will differ slightly depending upon factors such as scope, value, supplier market. We may use existing All of Government consultancy panels or closed tenders in some cases. Any procurement related advertising will be on GETS, the government electronic tender service.
Fill in our online form to register your business’ interest.
Completing this form is not a requirement for consideration in future procurement processes. We are not accepting requests to talk or meet with prospective suppliers outside of active procurement processes.