Finance Minister Michael McGrath has said that he expects legislation protecting the use of cash to be brought to Government for approval to draft shortly. His comments were made as a public consultation which will feed into the proposed legislation around the use of cash, was launched this week.
The consultation, which seeks views from both the public and industry, is open for submissions until 14th February 2024.
The department of finance says that the responses received will form “an important part” of the NPS, set to be published next year.
Speaking in the Dáil on Wednesday, Minister McGrath said that the legislation is in the process of being drafted, along with the heads of a Bill.
The finance Minister highlighted access to cash, both the ability to withdraw and deposit cash, as a “key issue” identified by the Retail Banking Review, which was published last year. He said a number of recommendations made in the government-approved review addressed the issue.
Mr McGrath said that the government’s National Payments Strategy (NPS) was also looking at how to tackle fraud domestically, and the acceptance of cash by both the private and public sectors.
“A public consultation will be issued shortly,” he said in response to a question from Fianna Fáil TD Cormac Devlin, who asked the Minister about the key policy achievements and initiatives taken by his Department over the last year.
Speaking on Tuesday, Minister McGrath said: “We must recognise the important role that cash continues to play in our society and economy, and this is a role I am determined to protect.”
The last national policy in the area was set out in the National Payments Plan (NPP) in 2013 and, since this time, the banking and payments landscape has changed “significantly in Ireland,” according to the Department. It noted how the number of banks serving the sector reduced from 12 to 3, and how there has also been a “considerable acceleration” in technological developments, which it said had been accelerated by Covid.
“With that has come a decline in cash usage,” the Department said in June of this year when the NPS terms of reference were published.
In November last year, the Retail Banking Review was published and contained two clear recommendations regarding payments: for the Department of Finance to develop Access to Cash legislation and prepare heads of a bill in 2023 and; for the department to lead on the development of a National Payments Strategy in 2024.
In June, commenting on the content of the NPS, the Finance Minister said that the strategy would “set out a roadmap” for the “future evolution” of the entire payments system, taking account of developments in digital payments, use of cash, and how future changes should be made to the legislative criteria regarding Access to Cash.
Speaking at the launch of the public consultation on the National Payments Strategy (NPS) on Wednesday, Mr McGrath said that cash remained “a very important part” of many people’s daily lives, and that by ensuring continued access to it, the Government would seek to address the “potential risk of financial inclusion” posed by digital payments.
Speaking on Tuesday, Mr McGrath said:
“We have to make decisions about what is an appropriate right and in respect of certain goods and services. Not necessarily on every good or service.”
He added: “I think necessities is where you start to make sure nobody is excluded but we’ve yet to make a specific decision about individual items of expenditure.”
The NPS will look at cash access and cash acceptance as two inter-related issues. Regarding access to cash, the Department said that the legislation will seek to ensure that cash access will remain at about December 2022 levels initially.
Speaking on Tuesday, Mr McGrath reiterated that going forward, access to cash should be “no less than what we have now”.
The Department has said that with that comes a need to ensure that cash “can be accepted as a means of payment where possible.”
The legislation could require certain sectors or sub-sectors to accept or facilitate the acceptance of cash; and the NPS will consider if it should be policy to require the public service to accept or facilitate the acceptance of cash.
The NPS is also set to take account of the EU legislative landscape, including existing proposals on instant payments and expected proposals on payment services, legal tender and the Digital Euro.