News in Brief

Uncertainty Whether a Cashless Society is Possible

Last month's Cyclone Gabrielle that hit New Zealand led to payment problems when power outages meant ATMs and payment systems didn’t work for several days. The importance of physical cash was shown yet again and the Reserve Bank of New Zealand (RBNZ) is now considering new ways to ensure physical cash is available when power and telecommunication networks aren’t available.

RBNZ is looking at whether non-bank entities such as the supermarkets can offer ‘cash-out services, although how this would be paid for and security issues need thinking through. The closure of bank branches has increased reliance on ATMs and the internet, reducing resilience and increasing vulnerability, according to RBNZ Governor Adrian Orr.

RBNZ’s Assistant Governor Karen Silk said ‘cash becomes incredibly important as the primary form of payment’ and that the cyclone has shown ‘the importance of physical cash still in society today.’