The Covid pandemic may have triggered a permanent decline in the use of cash, a new study from the Central Bank indicates.
An economic letter, published by the regulator, examined ATM withdrawals before, during and after the Covid-19 pandemic. Before the outbreak, the average monthly value of ATM withdrawals was around €1.5 billion.
Following the imposition of a strict lockdown in mid-March 2020, ATM withdrawals declined sharply, before recovering, the study found. Monthly ATM withdrawals averaged €1.04 billion from June 2020 to June 2022, it found.
The value of ATM withdrawals in June 2022 was 7 per cent higher than in September 2021, “suggesting consumers are withdrawing larger amounts in response to inflationary increases”, it said.
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However ATM withdrawals have not recovered to pre-pandemic levels.
“The Covid-19 pandemic saw a partial shift from making payments with cash to undertaking them with cards and other means, which in part reflects a move to online shopping,” the study said.
It noted that point-of-sale payments made by debit cards in Ireland rose from €3.4 billion in February 2020 to €4.9 billion in the corresponding month of 2022.
“Many card payments are now contactless in nature, a feature that allows them to be used for small-value payments that were previously mainly the preserve of banknotes and coin,” it said, while noting cash remains a widely-used payment instrument in Ireland and throughout Europe.
The authors of the study conclude that “both the value and volume of ATM withdrawals in Ireland underwent a structural downward shift at the outset of the Covid-19 pandemic with a reduction in the mean of monthly withdrawals occurring”.
“Nevertheless, the analysis indicates that ATM cash withdrawals remained steady subsequently by value and by volume, but at a lower average monthly value than arose before the pandemic, speaking to cash’s unique attributes as a means of payment and a store of value and its consequent enduring appeal to the public,” they said.
