Reserve Bank’s plan to save cash could require banks to open 1300 multi-bank hubs
Wednesday, 25 February 2026
The Reserve Bank is consulting on requiring banks to provide cash services to the public, a move that comes as a visiting International Criminal Court judge’s experience has shown global payment systems are being politicised.
The Reserve Bank, which issues New Zealand’s banknotes and coins, wants to set a minimum “floor” of cash services registered banks must provide, with the aim of having 95% of urban populations within a 3km walk of free-of-charge cash services, and 95% of rural town dwellers being within a “reasonable” drive of cash services.
The move could see banks have to collaborate to set up 1300 service operations to deliver cash services, including multi-banking hubs and cash “depots” of smart ATMs.
The Reserve Bank estimates that would cost the banking system around $104 million each year, though the Reserve Bank says the benefit to New Zealand could be as much as $2.85 billion.
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The cash services the Reserve Bank is talking about included bank customers being able to withdraw, deposit and swap cash.
But in its consultation document published today, the Reserve Bank references only the strategic importance of having cash widely in use during payment systems outages and natural disasters.
Ian Woolford, director of money and cash at the Reserve Bank, said providing cash services was part of banks’ social contract with New Zealand, pointing out that banks were very profitable.
Cash also underpinned banks’ businesses because physical dollars issued by the Reserve Bank acted as an anchor or value against which dollars in bank were valued.
Woolford said similar moves to require banks to provide cash services at minimum levels had been made in countries overseas, including Ireland, The Netherlands and the UK.
There was no current plan to require businesses like retailers to accept cash.
People are not using cash as much as they used to, and digital payments are becoming more common.
But cash won’t die, and Woolford did not expect New Zealanders ever wanting to stop using it.
Studies have shown some people use cash for managing their budgets. People carry and store cash for emergencies. And it is also used for grey and black economy activities: crime, drugs, and tax avoidance. It is also used for cultural practices like giving koha, and teaching children about finances.
On Tuesday evening Kimberly Prost, a judge of the International Criminal Court and Hotung Visiting Fellow at the University of Canterbury, gave a speech at the University of Auckland’s Law School in which she referred to her exclusion from the credit card system.
The Canadian judge is one of nearly a dozen members of the court sanctioned by the Trump Administration over an investigation into atrocities committed in Afghanistan, including by members of the US military.
The sanctioning saw her credit cards cancelled, and her Amazon and Google accounts cancelled, a fact she referenced in her speech on Tuesday night.
In one recent interview, she told reporters: “You just sort of end up using cash a lot, and trying to appeal to people a fair bit.'
Woolford said fears of political repression had not featured in feedback to the Reserve Bank in its consultations on cash, however, he said the public valued the privacy that using cash brought.
There have been spikes in cash as a store of value, when fears of a banking crisis have emerged, such as in the Global Financial Crisis of 2007/08.
Cash in the hands of the public has risen every single year since 1998, except 2025, which saw cash in circulation slipping from $8.6 billion to $8.59b, possibly the result of squeezed households spending cash stored in their homes.
But cash is expensive for banks to move around.
As a result cash deserts have appeared as banks have shut branches, especially in rural areas. The Reserve Bank says 40% of bank branches have closed in the past decade, adversely impacting rural communities.
The consultation does not require banks to keep branches open, however.
It envisages banks will expand their footprint of co-owned multi-bank hubs, of which there are currently just five operating in Martinborough, Ōpōtiki, Twizel, Waimate and Whangamatā.
Banks would be free to work out how they would deliver cash services, providing they met the minimum floor the Reserve Bank would set under the proposals, Woolford said.
Under the proposed standard, there would have to be at least 2.5 multi-bank, full-service cash sites per 10,000 people, or the equivalent using partial service sites, so 95% of people living in an urban area would face only a walkable distance to free-to-use cash withdrawal, free-to-use cash deposit and free-to-use cash swap services.
Urban is defined as places where 1000 or more people live in close proximity, and walkable is defined as no more than a 3km one-way journey.
The rural standard would be for 95% of people living in a rural area would only face a reasonable driving distance to free-to-use cash withdrawal, free-to-use cash deposit and free-to-use cash swap services. A rural settlement refers to places where 200 to 999 people live in close proximity, and a reasonable driving distance is defined as no more than a 15km one-way journey for people living in rural settlements, and no more than a 30km one-way journey for people living remotely.
The Reserve Bank has prepared district maps to go with its proposal.
Banks and the public have the chance to make submissions on proposal until April 10.