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Impact of COVID-19 on cash use in New Zealand

Our latest cash and payments data update shows COVID-19 had a big impact during 2020, particularly in accelerating the decline in transactional cash use.

What the data shows

Our Cash and Payments Data Update: COVID-19 special report published in June 2021 reveals the impact of the COVID-19 pandemic on our cash and payments system.

The pandemic has accelerated the decline in transactional cash use, compounded by accelerating reductions in banks’ branch and cash services, and despite New Zealanders’ rush to cash in March 2020.

Key take outs:

  • About 70% of the population indicated in 2020 that cash is one way they use to pay for everyday things, compared to 96% in 2019 and 2017.
  • The value of cash withdrawals has reduced from February 2020 by about 20%—likely due to less demand from New Zealanders and an absence of international visitors.
  • Digital banking and contactless payments are increasingly popular. Contactless is now the preferred way of paying for most New Zealanders (36%) and over 70% of people are making payments from their bank accounts.

Closure of bank branches

The closure of branches of the five major banks accelerated between September 2019 and March 2021, with about 211 branches closed over that time. That was just under a quarter (24%) of the 863 branches that were operating in September 2019.

Additionally, the number of branches operating on reduced days and hours has grown. It now appears to be about half of all branches operated by the major five banks. Rural areas have been more affected by changes to the branch network than urban centres.

Self-service checkouts

The number of self-service checkouts in New Zealand has grown significantly since 2019. Most of these (about 70%) now only accept card payments. This compares to 2019 when about 80% accepted both cash and cards.

Preferred payment method

Most New Zealanders can pay using their preferred payment method most of the time, and this is slightly higher for cash users compared to those who pay using other methods.

Demand for cash

As the COVID-19 pandemic started to seriously impact the country, demand for cash grew sharply.

In the weeks leading up to the nationwide lockdown in March 2020, we issued about $800 million, compared to $150 million in March 2019. Most of the cash withdrawn in March 2020 has not been returned to us.

Download the Cash and Payments Data Update: COVID-19 special report (PDF 1.8 MB)