Dermot Jewell: The future of cash in our digital society

The most frequently used payment method at the point of sale in 2022, in the euro area, for 59% of consumers, was cash.

Disappointingly, there had been no engagement or consultation with the consumer — the person who pays for the goods and services upon which business and our economy rely to survive — when it comes to cash payments and usage.

Notably and importantly, choice in the manner of payment is often denied to the payer, and determined by the preference of the seller. This has introduced an imbalance in the system for all parties.

That has changed in two specific ways as, firstly, we now have results from an EU-wide survey that outlines, in quite significant detail, the payment preferences of those paying consumers. The second is the focused interest from the Department of Finance following on from the retail banking review recommendations.

The Study on the Payment Attitudes of Consumers in the Euro Area (SPACE) was launched by the European Central Bank (ECB) in 2019. The goal has been to best understand the changing payment habits of consumers. The foreword of the report is clear ‘Ensuring access to means of payment, cash and cashless, is at the heart of both the Eurosystem’s retail strategy and its Cash 2030 strategy’.

We have all recognised the changes in payment preferences that were previously limited but significantly boosted through the covid lockdowns. Increasing the €30 contactless tapping limit to €50 has been a highly popular move and statistics from the ECB study show that card payments were used in 34% of point-of-sale transactions. This is a clear and significant increase from 2016 when the figure was 19%.

However, the SPACE 2022 results also are clear that the most frequently used payment method at the point of sale, in the euro area, for 59% of consumers, was cash. Consumers use cash to ensure they maintain a better awareness of their living expenses as well as provide them with a level of privacy and personal protection that cannot be otherwise guaranteed.

The alternative, of course, is the convenience of electronic payment in so many ways. This is the key point to reflect upon. We have progressed and must continue to do so to facilitate the needs of all. 

It is the take-it-or-leave-it cashless situation that is understandably being seen as unacceptable and inconsiderate from the perspective of many consumers. Their lifestyle in making payments is being dictated to them without consultation or consideration.

These were the reflections put to the Minister for Finance in a Dáil Éireann debate in March of this year. The debate provided insight into progress on the recommendations of the November 2022 retail banking review. The minister advised that, in what he described as a key issue, access to banking services and particularly the ability to withdraw and deposit cash was a focus for implementation.

The debate moved to the context of the ECB survey where the majority demanded the option to pay in cash. The reduction of cash services announced and later reversed by AIB highlights this. The minister advised that access to cash is recognised as an important issue for communities and ordinary citizens and further outlined that the Bill under consideration will be a practical one to ensure access to cash is protected for those who choose that option and, notably as "people have a right to use cash".

The importance here is the recognition and reminder that cash remains to be legal tender across the EU. We do not yet live in a cashless society and the value of the enormous support to the economy from those who choose to pay in cash is to be neither underestimated nor undervalued in terms of business continuity, job creation or customer loyalty.

• Dermott Jewell is Policy and Council Advisor with the Consumers’ Association of Ireland