Banks save money by removing ATMs, but cash users pay the price

Summarised by Centrist

Banks are removing ATMs and branches as customers increasingly use cards and online banking, but the savings are being felt most sharply by people who still rely on cash.

ANZ has cut 85 ATMs over the past two years, while Westpac has removed 54. In most cases, ANZ says another provider took over the location. That can mean customers who once withdrew their own money for free now face a $2.50 fee at a privately operated machine.

The wider retreat is substantial. The Reserve Bank says bank branches have fallen 40 per cent over the past decade, while bank-owned ATMs have declined 32 per cent.

Banks say they are responding to usage. New Zealand Banking Association chief executive Roger Beaumont said only “around 1.5 per cent of all customer transactions are made at an ATM”, and that number was “slowly reducing every year”.

But that statistic obscures the people left behind. The Reserve Bank’s latest data found 40.3 per cent of New Zealanders still use cash for everyday purchases. Only 2.5 per cent said they never use it.

For many households, cash is a practical budgeting tool. Financial mentor network Fincap says people use it to control spending, while residents in rural communities can face significant travel costs simply to access their own money. It also warned that people with disabilities, limited time or other obligations can be excluded when free options disappear.

The Reserve Bank has proposed minimum cash-service standards, including a goal that 95 per cent of urban residents should live within walking distance of a free cash point. It estimates the system would cost banks about $100 million a year, or roughly 1 per cent of their combined annual profit.

Read more at RNZ

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