The Future of Cash Use - Te Whakamahinga Moni Anamata

Cash is being used less as a means of payment, and access to cash is declining. However, cash provides important benefits to many people, including legal tender money, social and financial inclusion, peer-to-peer payments, backup payments, privacy and autonomy. This section outlines policy and engagement work which confirmed these benefits, along with supporting data and research on cash use.

Today, the vast majority of New Zealand’s money balances are digitally represented and bank notes make up just seven to nine percent of liquid money.

Few people use cash for their everyday transactions. However, some people, such as tourists and those who are financially, digitally or socially excluded do heavily rely on cash. These include people who don’t have access to the banking system, or with challenges that prevent them accessing it. They come from among, for example, people with disabilities, senior citizens, people with low socio-economic status, and people living rurally with limited internet services.

Our 2019 public cash use survey indicated that six percent of New Zealanders rely on cash for their everyday needs.

New Zealanders’ use of cash ‘over the last seven days’ is declining
Share of survey respondents

figure 1

Despite the decline in its transactional use, cash in circulation continues to increase. This is likely due to its usefulness to some as a store of value.

In addition, cash provides key public benefits including legal tender money (that represents a claim on the government), instant ‘in-person’ settlement, emergency offline backup payments, and privacy and autonomy in savings and payments.

These benefits of cash were agreed by the Minister of Finance in February 2020, following extensive formal consultation and general engagement activity during 2019. The public policy case on cash was set out in The Future of Cash Use issues paper and was followed up by a series of korero moni (cash conversations) held with diverse communities and representatives across New Zealand.

These benefits of cash have so far been not well replicated by electronic money in commercial banks.

For more information on cash issues and use in New Zealand (we do not endorse or take responsibility for the views or operation of external websites):

The Future of Cash Use - Te Whakamahinga Moni Anamata issues paper- RBNZ, June 2019
We published this issues paper in June 2019, and invited feedback from individuals and groups up until 31 August 2019. The issues paper discusses: the role of cash in society, understanding cash supply, cash trends in NZ and internationally, electronic substitutes, considerations arising from having less cash in society, and five key issues to consider. A Summary of Responses is provided (PDF 3.24MB).

Should access to cash be a human right in New Zealand? - Stuff, 19 June 2019
Journalist Rob Stock gave this summary of the Issues Paper on the day it was published.

Facebook and the new monetary revolution - Nine To Noon, RNZ, 20 June 2019
Facebook proposed its Libra digital currency at the same time as we released the Issues Paper. In this interview with Kathryn Ryan, Assistant Governor Christian Hawkesby discusses the international money story of the day and links it to our own Future of Cash work.

With cash no longer king, what will the future of money look like? - Seven Sharp, TVNZ, 30 August 2019
Journalist Julian Lee presented a three-part series featuring exclusive access to our vaults and an interview with Assistant Governor Christian Hawkesby backgrounding our work and highlighting the issues in the final days of the consultation.

Public want a 'right' to use cash, says Reserve Bank governor Adrian Orr - Stuff, 24 February 2020
This story, covering a wide-ranging speech by Governor Adrian Orr, leads with the strong messages given and taken on board from more than 2000 responses received for the issues paper.