Consumers are returning to cash with larger and more frequent ATM withdrawals


CONSUMERS are withdrawing larger sums of cash each time they use an ATM due to higher prices charged and more frequent cash withdrawals than during the pandemic.

New research from the Central Bank shows that the average amount withdrawn each time someone uses an ATM has started to rise again.

Cash withdrawals from ATMs plunged during the pandemic when people were advised to use their payment money instead of handling cash for fear of spreading the Covid-19 virus.

The closures also led to a huge increase in online shopping as non-essential outlets were closed and people wanted to avoid interacting with others.

Some of the pandemic-inspired shifts toward card use, especially contactless ones, seem to have taken hold.

Point-of-sale payments made by debit cards in Ireland rose from €3.4 billion in February 2020 to €4.9 billion in the same month this year, the Central Bank said.

Each month, consumers had collectively withdrawn 1.5 billion euros from ATMs across the country before the shutdowns.

But that fell by a third to €1bn a month during the Covid-19 lockdowns.

The study by Central Bank economists shows that the number and value of ATM withdrawals started to rise again when restrictions were eased.

Experts say this indicates the Irish’s strong attachment to the use of cash.

The new study comes months after AIB was forced to backtrack on its plans to withdraw cash services and ATMs from 70 branches.

The research paper authored by David Cronin and Niall McInerney said that despite an increase in card payments in recent years, “a steady demand for cash transactions at ATMs remains clear”.

The paper examines changes in the value and volume of monthly cash withdrawals from ATMs since 2015.

The research also found that the value of withdrawals increased alongside higher rates of inflation.

“The amount withdrawn in June 2022 was 7% higher than in September 2021, reflecting the percentage increase in the value of the consumer price index,” the central bank said.

It was found that the number of monthly ATM withdrawals has increased since January last year.

The Central Bank study refers to research commissioned by the Department of Finance in April which found that one in five Irish adults prefer to pay cash in shops.

And 73% of Irish adults regularly use ATMs, according to a study by the Department of Finance.

Cash is more attractive than cards to many because it protects the privacy of its holder, it allows money to be kept in person, as opposed to a bank account, and it helps with budgeting by making it more difficult to excessive spending.

In Ireland, the greater use of cash in payments is made by older age groups, working class people and people living in rural areas, the Central Bank said.

Before the pandemic, the average ATM withdrawal was between €130 and €135, increasing a bit at Christmas.

In June 2020 and May 2021, the average monthly range was €148 to €161, due to people making fewer withdrawals, but withdrawing more money each time they used an ATM.

But the number of monthly ATM withdrawals has been increasing since January 2021.

During this month, there were 5.23 million withdrawals, while the number in June 2022 was 7.95 million.

That’s nearly two-thirds of the pre-pandemic average, the central bank said.


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