Consumers switching back to cash with larger and more frequent ATM withdrawals

CONSUMERS are withdrawing larger amounts of money each time they use an ATM as higher rates are charged and are withdrawing cash more frequently than during the pandemic.

A new Central Bank study shows that the average amount withdrawn each time someone uses an ATM is rising again.

Cash withdrawals from ATMs had plummeted during the pandemic, as people were advised to use cash instead of handling cash over fears of spreading the Covid-19 virus.

The lockdowns have also led to a huge surge in online shopping as non-essential retail outlets have closed and people have sought to avoid interacting with others.

Some of the pandemic-inspired shifts to using cards, particularly contactless, appear to have become permanent.

Point-of-sale payments made with debit cards in Ireland rose from 3.4 billion euros in February 2020 to 4.9 billion euros in the same month this year, the central bank said.

Before the lockdowns, consumers had withdrawn a total of €1.5 billion each month from ATMs across the country.

However, during the Covid-19 lockdowns, this fell by a third to €1 billion per month.

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 reflects the Irish people’s strong attachment to cash.

The new study comes months after AIB was forced into an about-face over plans to remove cash services and ATMs from 70 branches.

The research paper, authored by David Cronin and Niall McInerney, states that despite a surge in card payments in recent years, “a steady demand for ATM cash transactions 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 has increased in line with higher rates of inflation.

“The amount withdrawn in June 2022 was 7 percent higher than in September 2021, reflecting the percentage increase in value of the consumer price index,” the central bank said.

It has been noted that the number of monthly ATM withdrawals has increased since January last year.

The central bank’s study is based on an April survey commissioned by the Treasury which found that one in five Irish adults prefers to pay cash in shops.

And 73 per cent of Irish adults regularly use ATMs, a Treasury Department study found.

Cash is more attractive than cards to many because it protects its holder’s privacy, allows money to be held personally as opposed to a bank account, and helps with budgeting by making it harder to overstay.

In Ireland, cash payments are being used more 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, rising slightly over Christmas.

Until June 2020 and May 2021, the average monthly range was €148 to €161 as people withdraw less money but withdraw more money each time they use an ATM.

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

There were 5.23 million withdrawals that month, while the number in June 2022 was 7.95 million.

That’s almost two-thirds of the pre-pandemic average, the central bank said. Consumers switching back to cash with larger and more frequent ATM withdrawals

Fry Electronics Team

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