5.1 Cash Usage in Ireland

5.1 Cash usage in Ireland

The retail banking sector plays a central role in the Irish cash cycle and cash supply chain. According to a 2023 Consumer Sentiment Banking Survey[1], access to cash is mainly via ATMs (used by 78% of consumers), bank branches (used by 17%), An Post (used by 9%) and retailers (cash-back used by 18%). Cash is transported throughout the State by companies in the Cash-in-Transit (CIT) sector. This sector is predominantly led by two companies, which are increasingly providing cash processing services for the main retail banks. In the last few years, the provision and operation of ATMs, are increasingly operated by IADs (by end-2021, c.75% of the ATM network was owned by IADs), of which there are currently nine such operators in Ireland. Previously, these services would have been mainly provided by the retail banks.

The Central Bank supplies cash on demand and accepts lodgement of surplus and unfit cash. Institutions[2] in receipt of this free of charge service are then considered responsible for the onward distribution of cash to other institutions and their own customers, including retailers, other businesses and members of the public.

Cash use, is one metric to measure cash demand, and the associated need for cash access in the economy. In terms of cash use in Ireland, the ECB’s SPACE survey[3] published in December 2022, found that in Ireland cash represented 54% of transactions at PoS in terms of number of transactions (euro area average 59%) and 44% in terms of value of transactions (euro area average 42%). Based on the survey data there is a different between cash usage (versus digital payment), which is marginally lower in Ireland than the euro area average, compared to the preference of Irish consumers, which is marginally higher than the euro area average, as shown in the Figure 12 below at 28% in Ireland and 22% in the euro area. It also noted that the average cash in an Irish person’s wallet was €107, higher than the euro area average of €83. The survey also found that some 64% of people felt it was important to have the option to pay with cash (33% saying very important and 31% saying fairly important), four percent higher than the euro area average. In terms of person to person (P2P) transactions, the survey found that Irish people used cash in 72% of such cases, which is broadly in line with the euro area average of 73%.

Figure 12: Preferred payment instrument in Ireland

Source: ECB Space Survey

Cash usage can also be examined through banknote withdrawals from ATMs, which is the most popular means of withdrawing cash in Ireland. Cronin and McInerney (2022)[4] assessed monthly ATM withdrawals in Ireland from January 2015 to June 2022. This paper showed that monthly withdrawals were, on average, €1.5bn before the pandemic, and there was a sharp fall in withdrawals in the spring of 2020 when Covid-19 and related restrictions on travel and interactions in retail premises adversely impact on the circulation of cash. There was a subsequent recovery in withdrawals from the summer of 2020 onwards. Since then, the monthly withdrawal value has averaged €1bn. The Covid-19 pandemic therefore, led to a structural shift in ATM withdrawal (which may have occurred in any case in a more truncated period of time) that has largely persisted. Figure 13 shows the number of ATM withdrawal transactions in volume terms from 2014 to 2021 (latest available data) which are on a downward trend since 2018.

Figure 13: ATM withdrawal transaction numbers

Source: Central Bank Statistics