Reserve Bank of NZ survey: Use of cash in sharp decline since pandemic

The number of Kiwis using cash is declining. Photo / NZME

New Zealanders' use of cash has declined sharply in the pandemic, a new survey by the Reserve Bank has found.

Just 63 per cent of Kiwis now use cash at all, the RBNZ's 2021 Cash Use Survey has found.

That's a big decrease from 2019 when the survey found 96 per cent still used cash.

Of those who do use cash, 40 per cent now do so less than twice a week.

The 2021 Cash Use Survey is the third in a series, following surveys in 2019 and 2017.

The proportion of New Zealanders who relied on cash remained steady at 6 per cent, but the drop in those paying with cash was significant, said RBNZ head of money and cash Ian Woolford.

"As in previous years, these people are more likely to be older, poorer, living rurally, or Māori."

The survey found significant differences between the cash use of Māori and non-Māori.

Cash was the preferred way to pay for 22 per cent of Māori compared to 12 per cent for non-Māori.

For 42 per cent of Māori, one of the reasons they used cash was for cultural reasons (such as koha and gifting) compared to 24 per cent for non-Māori.

The main reason people said they still used cash was for shops and stalls that only used cash.

The proportion of "heavy" cash users dropped to 2 per cent in 2021, from 5 per cent in 2017.

Heavy cash users are defined as those who used cash 11 or more times in the seven days prior to completing the survey.

Of cash users, 8 per cent said they found it somewhat difficult or very difficult to get cash out while 24 per cent said the same about depositing cash.

Meanwhile, it was clear that having some cash stored away was increasingly important for many during times of uncertainty, Woolford said.

The percentage of Kiwis keeping a store of cash rose from 37 to 46 per cent from 2017 to 2021.

The Reserve Bank has a long-term project under way looking at redesigning the cash system to match the changes in usage.

A new Reserve Bank consultation paper - The Future of Money - Cash System Redesign - was published by the RBNZ last November. Public submissions on the paper close next Monday, March 7.

The paper suggested a range of options to keep cash available as its usage declined.

For example, it could potentially require commercial banks to pay more to cover the cost of withdrawing cash at ATMs and via retail point-of-sale systems.

Other options included requiring some merchants and government agencies to accept cash, and requiring banks to provide cash services.

The Reserve Bank was committed to keeping cash available "for as long as it is needed", deputy governor Christian Hawkesby said, when the paper was released last year.

"We're wanting input to develop the right set of policies to ensure the cash system is resilient and efficient in the face of changes in use and availability."

But the issue of who paid to keep cash in circulation as its use declined was complex.