Opinion: Is RBNZ’s cash debate only about ‘access’ or something much bigger?

Having access to cash regardless of where you live, what you do or which group you belong to, is not only about payments made and received, it’s about equity, financial wellbeing and financial resilience of individuals and communities.

As debate around the Reserve Bank’s ‘keeping cash local’ proposal intensifies, New Zealand risks overlooking what cash truly represents in different contexts and communities. I am not talking about resisting digital progress. Rather, it is about designing a financial system that supports peoples’ wellbeing rather than unintentionally undermining it.

Financial capability alone cannot guarantee financial wellbeing. Peoples’ outcomes depend just as much on whether the systems they are required to use are accessible, equitable, reliable and designed around real-world needs. Cash access lies at the heart of that intersection.

The relationship between access to cash and how it influences someone’s ability to budget, manage stress and maintain a sense of control over their finances, is consistently highlighted through the Financial Education Centre’s work. Cash enables clear mental accounting, supports disciplined budgeting and provides a tangible connection to spending that digital tools have not fully replicated.

In the past decade or so, the invisibility of cash has influenced peoples’ relationship and attitudes toward money. We have a generation of children going through the school system and operating in the real world without meaningful understanding of where money comes from and how hard their parents work to provide the comfort and security they enjoy.

One unintended consequence of the closure of a branch or ATM, is that its impact is not a minor inconvenience to those directly affected. It also affects a person’s stress levels, confidence and ability to manage day-to-day expenses. Yet these consequences remain invisible at times when policies are made based only on metrics such as payment methods, speed or digital uptake. These measures reveal little about lived experience. I would argue that if a community does not have access to cash, then it is inevitable that data showing low cash use can easily be interpreted as a preference for digital or online payment methods.

Research on financial inclusion shows that declining cash access disproportionately affects those already navigating constraints, people with limited digital skills, unreliable connectivity, disabilities, language challenges or low incomes.

Crucially, digital capability and cash dependence often overlap rather than substitute for one another. Communities experiencing digital exclusion are frequently the same communities most reliant on cash, especially in rural areas.

Recent climate-related events and infrastructure disruptions have shown how quickly digital systems can fail. Weather-related events highlighted that households use cash differently before, during and after disruptions, and that access to cash can materially affect how quickly people recover from short-term shocks.

Small community organisations, marae-based enterprises and clubs also rely heavily on cash handling to function. During disruptions, cash plays a stabilising role in keeping community activities operating.

For many in hospitality, tourism and rural retail, reliable cash services are part of the business model. When these services are removed, operational costs increase, stress rises and customer relationships change.

A recurring theme in national and international research is that financial capability cannot compensate for poor system design. Expecting everyone to simply ‘adapt’ to a digital-only future ignores the diversity of peoples’ circumstances, vulnerabilities and needs.

To ensure a payments system that supports financial wellbeing, New Zealand should:

• Treat cash access as an essential public good
• Evaluate payment system changes using wellbeing and resilience indicators
• Ensure vulnerable and rural communities do not bear the adjustment costs of digital transition
• Invest in digital innovation while preserving a robust cash system.

Digital innovation and robust cash systems are not mutually exclusive and nor should they be. Demanding and expecting access to cash is not resistance to the future. It is protection of the wellbeing, autonomy and resilience of New Zealanders and the communities and businesses that sustain them.

Access to cash is a wellbeing issue, not just a payments issue.

Dr Pushpa Wood is Director of the Financial Education and Research Centre at Te Kunenga ki Pūrehuroa Massey University.