A bill put forth by New Zealand First would require stores to take cash for purchases up to $500. Photo: 123rf
Explainer - Cash is king, some people say - while others wouldn't be caught dead without their PayWave and Apple Pay.
But a new members' bill put forward by New Zealand First would protect cash as a key option in transactions, requiring stores to take it for purchases up to $500.
If drawn from the ballot and passed, NZ First leader Winston Peters said it would "provide for the enduring use of cash as a private, accessible, and reliable method of payment".
The party cited rural communities, the elderly and low-income earners as being disproportionately affected by businesses that don't accept cash.
As a members' bill, lodged 14 July in the name of NZ First MP Jamie Arbuckle, it's still a long while from possibly becoming law, but it does propose sweeping changes in how businesses treat cash and looks at who gets left out in a digital economy. Here's what you need to know.
What does the bill propose?
The Cash Transactions Protection Bill would mandate businesses in trade accept cash payment for goods valued up to $500.
"The bill ensures that New Zealanders maintain freedom of choice in how they pay, preserving cash as what it should be: an enduring private and reliable option", Peters said in introducing it.
"By protecting the sanctity of cash transactions, the bill upholds personal privacy, maintains sovereign control over New Zealand's monetary system, and lessens the risks posed by digital-only payment systems."
There are some exceptions given to the bill's requirements, including online retailers and land purchases.
The bill also would propose that "payment in cash must be accepted for essential goods or services" - which it defines as food, water, fuel, health care and household utilities.
Another part of the bill would require businesses to keep cash on hand for emergencies:
"A vendor must ensure they have sufficient access to cash to allow them to continue to trade in the event of a digital or electrical outage that lasts longer than 24 hours."
In the introduction, the bill says it "preserves cash as an explicit privacy-preserving payment method, ensuring both freedom of choice and freedom from unwarranted surveillance in financial transactions".
"It puts New Zealanders' interests above global trends toward digital currencies, maintaining sovereign control over New Zealand's monetary policy and mitigating the risks associated with digital-only financial systems, like restricted access to funds."
The bill also calls for fees or fines from $1000 to a maximum of $5000 for infringements.
New Zealand First leader Winston Peters. Photo: RNZ / Mark Papalii
Will it become law?
It's quite a long way from that, actually.
As a members' bill, it's not yet guaranteed it will ever go to the House for a vote.
The bill first will have to be randomly drawn from the ballot to be considered at all in the House, and then undergo the same process of debate and referral to select committees as any other bill.
While it's on the members ballot, MPs are allowed only one bill in the lottery at any given time. NZ First has swapped out its bills on several occasions this term, so there's also no guarantees over how long this legislation will remain in the ballot.
Speaking to Checkpoint recently, Retail NZ CEO Carolyn Young said she wondered if the bill was "kind of a sledgehammer for a small problem".
Marisa Bidois, chief executive of the Restaurant Association of New Zealand, said the bill ignored realities many businesses deal with.
"We understand the intent behind the proposed bill - no one wants to see people excluded from accessing essential goods and services. However, requiring all businesses to accept cash for transactions under $500 doesn't reflect the operational realities many businesses face.
"We believe businesses should be trusted to make the right decisions for how they operate and serve their customers."
Members' bills are often used to float an idea or gauge public reaction to it, Parliament's website notes.
Can a business really refuse to take cash?
Yes, as long as they "clearly inform customers in advance that they don't accept cash before you start shopping or receive services from them", the Reserve Bank of New Zealand said.
They can do that with a sign on the premises or telling you in person before you pay.
"Most hospitality businesses still accept cash, but a small and growing number are moving away from it, particularly in busy urban areas," Bidois said.
"Some customers do push back when cash isn't accepted, especially if they haven't been informed ahead of time. That's why we encourage clear communication."
You're also only allowed to pay so much of a bill in coins, by the way, in case you're thinking of clearing out that piggy bank - you're allowed up to $5 of 10 or 20 cent coins, $10 of 50 cent coins or $100 worth of $1 and $2 coins.
Shoppers are increasingly using cards over cash. Photo: 123rf
Who uses cash now, anyway?
According to the Reserve Bank's latest data released in June, 45.8 percent of the population are still using cash sometimes in "paying for everyday things" - although 79.1 percent are using debit cards/EFTPOS also.
Only 3.6 percent of people say they "never use cash," while 33.2 percent said they hadn't used cash at all in the past seven days.
Cash isn't quite the king it once was.
"We know that less than 10 percent of transactions that happen across New Zealand throughout the year now happen in cash," Retail NZ's Young said.
"In the cities a lot less cash is used and in rural areas and areas of deprivation there is a higher percentage of cash that is used."
Bidois said in the Restaurant Association's latest survey, 40 percent of respondents said cash made up just 5 to 10 percent of their transactions.
Still, when it comes to essentials, "there's no supermarket that doesn't take cash," Young said.
On Peters' Facebook page, the post announcing the bill has gathered nearly 3000 comments and 15,000 likes, with many expressing support for the idea.
"Thank you! I use cash as a way to keep within my budget, as my mother did," one wrote, while another said it was "an essential bill - especially for many of our elderly population".
Photo: RNZ / Leonard Powell
What are the benefits and downsides of electronic payments?
On the other hand, Young said that electronic transactions are often easier for businesses to deal with.
"Electronic transactions are much safer for a wide number of reasons," she said, including less chance of being targeted by thieves or counterfeit money, and less time for staff dealing with transactions.
"For many retailers and for hospitalities, cafes and things, cash is not always their favoured method of payment because of those challenges."
However, frequently complained-about surcharges such as those for PayWave are "not ideal", she said.
Many also have concerns about the privacy and security issues around digital payments and the records they leave behind.
Are some people being left out with a shift away from cash?
Cash also comes back to the table during disasters, such as Cyclone Gabrielle, which saw infrastructure knocked out widely.
"We do know that when the cyclones happened in Auckland and Gisborne and Hawke's Bay 18 months ago that the supermarkets were really critical for being able to, especially in those provincial areas … they really provided the cash that people needed to be able to pay for goods and services," Young said.
Bidois said that while there was a clear shift toward digital payments, it was all about striking the right balance for businesses.
"Many businesses are finding that tap-and-go is what most customers expect, and it makes day-to-day operations simpler.
"That said, our members care about customer experience, and most continue to accept cash to accommodate older New Zealanders, tourists, or regulars who prefer it."
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