Cash comeback? Bill seeks to make retailers accept paper money again

Tuesday, 8 July 2025

The Reserve Bank is committed to keeping cash, and is even looking at launching a digital version of cash.

New Zealand First MP Jamie Arbuckle has introduced a member’s bill that would require retailers to accept cash for smaller purchases.

The Cash Transactions Protection Bill, if it became law, would require retailers to accept cash for goods sold for up to $500, except retailers of essential goods like food would be required to accept it on even larger purchases.

Carolyn Young, chief executive of Retail NZ, the political lobby group for retailers, raised concerns that requiring all retailers to accept cash would raise costs for retailers, and also pose security risks with more cash being held in stores.

It was more expensive to process cash than electronic payments, Young said. New Zealand First’s bill would ban retailers from charging a fee, premium, or higher price for cash purchases.

Leader Winston Peters said the bill would provide for the enduring use of cash as a private, accessible, and reliable method of payment.

“People who rely on cash due to barriers to digital banking deserve assurance that cash will be preserved in the increasingly digital world,” he said.

Kiwi businesses and consumers say there’s always a demand for cash.

Cash was especially important for rural communities, vulnerable populations including the elderly, and low-income earners who may experience barriers to digital banking, he said.

But the policy summary for the bill also made it clear that the bill was also intended to preserve cash as an “explicit privacy-preserving payment method, ensuring both freedom of choice and freedom from unwarranted surveillance in financial transactions”.

It’s not just that cash has fallen out of favour, but there are increasing attempts by global technology companies to undermine sovereign currencies through the issuing of cyrptocurrencies, and so-called stablecoins.

Cash must remain a choice for all New Zealanders, so shops must accept it, New Zealand First says.

The introduction to the bill makes it clear New Zealand First is also concerned about this.

“[This bill] puts New Zealanders’ interests above global trends toward digital currencies, maintaining sovereign control over New Zealand’s monetary policy and mitigating the risks associated with digital-only financial systems, like restricted access to funds,” the party said.

For a member’s bill to become law it first has to be either drawn from the ballot, backed by a majority or MPs, or adopted by the coalition Government as a Government bill. It then has to pass through the Parliamentary process.

New Zealand First leader Winston Peters says, “By protecting the sanctity of cash transactions, the Bill upholds personal privacy, maintains sovereign control over New Zealand’s monetary system, and lessens the risks posed by digital-only payment systems”.

Predictions that New Zealand would become a cashless society have failed to come to pass, and many people still use cash to make purchases, and only a minority of people say they never use it at all.

The latest cash use data from the Reserve Bank Te Pūtea Matua is from June. It shows that 33% of people had not used cash in the past seven days, while 21% had used it once, 20% had used it twice, and 15% had used it between three and six times, while a smaller hardcore of cash lovers had used it more often.

About 6% of the population relied on cash to live their lives, the Reserve Bank said, and that was most predominantly among the elderly, the young, and lower income people.

Many people also continued to keep stores of cash, including for use in case of natural disasters strike, with just 17% saying they had no cash stored.

The Reserve Bank’s Future of Cash Te Moni Anamata programme started in 2019 in a bid to work out the most efficient system for keeping cash in circulation as use dropped.

Late last year, the Reserve Bank began a trial to test new ways for people, including retailers, to withdraw and deposit cash, including change and takings, at little or no cost to them.

Retail NZ’s Carolyn Young says fewer than 9% of retail transactions are in cash.

Not all the reasons people use cash are legal, however, and research indicates cash is frequently used in the black economy by criminals, and by people buying illicit items, or engaging in activities they may not want their loved ones to find out about.

Retail NZ’s Young said fewer than 9% of retail transactions were now done in cash, and a requirement for retailers to accept cash on payments up to $500 could have implications for money laundering of the likes of drug money.

It might also have security issues for shops, which may have to keep more cash in their stores in order to make change.

But it would also have an inflationary effect.

“The cost of processing cash is actually higher than the cost of processing electronic transactions,” she said.

She also questioned whether banks now had enough branches to cope with increased cash use, assuming that requiring retailers to accept cash would increase cash usage.

Back in higher-use cash days, retailers would make frequent trips to branches to deposit cash.

“Obviously, it is much harder to get to a bank these days now so many branches have closed,” Young said. “It would take us back to the 1980s.”

Roger Beaumont, chief executive of the Banking Association, the political lobby group for banks, said: “If the bill is introduced in Parliament, we will consult our members to see if there is an industry view.

“At first glance, it appears to be more of an issue for retailers, many of whom no longer accept cash for security reasons and the costs of handling it.

“Also, the Reserve Bank is leading work in this area, with its community cash trials in rural areas. Their insights from the trials should be very useful for retailers and the communities.”