These outlets don’t need your cash
Rakai Beazley says the Fort Lane outlet of his business, Ika Bowl, stopped accepting cash because it was more convenient to opt for electronic payments.
The Polynesian poke bowl restaurant, in Auckland’s CBD, went cashless in June.
Beazley said he had expected the customer base would be mostly university students and tourists.
But when it opened he discovered that the customers were mostly office workers who paid with their cards or phones.
‘‘Cash payments only made up about 5 per cent of our sales, but there were a few steps involved in handling cash – going to the bank if we needed change. It was so annoying,’’ Beazley said.
‘‘It was about convenience for us. We had some kickback in the beginning from customers for the first few weeks but customers no longer mind.’’
He said the change had cut down the payment time by 20 seconds.
Ika Bowl still accepts cash at its second location, in Auckland’s Wynyard Quarter, as there were more tourists around who paid with cash. This location, which is close to New Zealand’s base for the America’s Cup, also allowed Ika Bowl to negotiate lower card fees for its stores.
‘‘We basically told them ‘there will be a lot of millionaires coming to that area around the America’s Cup if you want us on board, drop your fees’.’’
It is becoming more common for businesses, especially small operations, to limit cash in favour of electronic payments. Ben & Jerry’s at Wellington Airport is cashless
Greg Harford, chief executive of Retail NZ, said while almost all physical shops accepted cash, the number of cash transactions – and the dollar value of them – was dropping.
He said a survey of members showed 4 per cent had thought about stopping accepting cash in the past year. Forty-four per cent said they might stop in future, and, of those, 5 per cent thought cash might be gone from their businesses by 2021.
The Reserve Bank has ben
looking into the future of cash use. It has identified that, despite an overall trend of increasing cash in circulation, New Zealand is becoming a society that uses little cash.
There is now $6.528 billion in cash in circulation, up from $6.155b last year and $3.723b ten years ago.
The central bank recently published a review of the submissions it received in public consultation.
It said there were some clear issues identified. About 45 per cent of respondents said they expected cash to become harder to get and use. Just under half said that would happen within the next 10 years.
There were concerns that people who were ‘‘digitally excluded’’ could be harmed by that shift – such as older people or those without good internet access.
Banking commentator Claire Matthews, from Massey University, said New Zealanders’ cash use was already declining significantly.
Although there was more cash circulating, the data showed a large number of $100 and $50 notes in the hands of the public, which is not the sort of cash that people most often use for everyday transactions, she said.
‘‘The fact it’s going up suggests that it’s being used outside the legal market.’’
She said people were probably predominantly using cash for transactions that they did not want traced.
But Eric Crampton, chief economist at The New Zealand Initiative, said he did not expect to see a cashless society any time soon.
‘‘I don’t think that there is substantial risk of cash use declining to the point that there start being substantial numbers of merchants unwilling to accept cash. But if we ever do get to that point, there will be an even stronger case for government to make sure that everyone is able to get bank accounts.
‘‘The government’s rules attempting to prevent money laundering have made it more difficult for people without fixed addresses to get bank accounts. Getting a bank account requires proving your residential address, which can be rather difficult in some cases; there would be an even stronger case for assistance in hurdling those barriers were cash use to decline substantially.’’
Christian Hawkesby, assistant governor at the Reserve Bank, said the feedback it received had validated its views about the impact of a decline in cash use, especially for those people who rely on it as a form of payment.
‘‘In October we released proposals to deal with some of these potential impacts by adding provisions to the Reserve Bank Act on the cash system.
‘‘These would give the Reserve Bank wider responsibility for stewardship of the cash system, including powers to collect data on the system’s operation, set standards for ATMs and other equipment which return the same cash they take in to the public, and to require retail banks to continue to provide cash services if required.
‘‘Within the Reserve Bank, the major focus for the first quarter of 2020 will be further developing an Indicative Business Case for our vaulting needs and approach to distributing cash.
‘‘We believe that we can have a more efficient and effective cash system, particularly by reducing the current commercial incentives for retail banks to transport cash in the system back to the Reserve Bank.
‘‘Where these arrangements land will also help determine the type of vaulting arrangements we need, including size, location and operating specifications.’’