The government is considering giving the central bank powers to regulate ATM operators.
It comes after the central bank raised concerns that three out of four ATMs in Ireland are now owned and operated by unregulated cash distribution companies due to a massive shift towards outsourcing by retail banks.
By the end of 2022, only 25 percent of the country’s ATM networks will be owned by the banking system, down from 100 percent owned by banks in 2015.
Bank of Ireland and AIB have combined sold 1,200 ATMs to unregulated operators in the last three years.
It has emerged that an ATM has been removed from the Dáil, with the operator saying only €200 was withdrawn from it over a four-week period last year. Operator Brink’s told Oireachtas that it will only continue to offer a serviced ATM if it agrees to a four-year contract worth around €38,000. The Sunday Times reported.
In December 2020, the Bank of Ireland sold 700 non-branch ATMs to Euronet, one of the largest ATM operators here.
At that time, Euronet committed itself for three years not to introduce any new fees for the use of ATMs.
In 2018 Ulster Bank sold ATMs they operated under the EasyCash name in 400 stores in Ireland to Euronet.
AIB sold a network of more than 500 off-branch ATMs to Brink’s in 2020.
This situation “poses challenges for consumers in accessing cash,” the central bank said
Brink boss Doug Pertz promised at the time that bank customers here “receive the same level of service without incurring any additional charges or fees when using our ATMs”.
In a filing to the Treasury Department’s Retail Banking Review, the central bank said the sale of so many ATMs to unregulated operators has meant that cash distribution and processing is now dominated by companies that the central bank makes
This situation “poses challenges for consumers in accessing cash,” the central bank said.
The filing, written ahead of last month’s furor over AIB’s decision to scrap cash services and turn off ATMs at 70 of its branches, warns that the growing barriers customers face in accessing basic banking services are having “significant social impacts ” to have
AIB was forced to reverse its decision after a massive backlash. The bank had claimed that cash withdrawals from ATMs had fallen by 36 percent.
The central bank’s filing document suggests the department is considering the “helpful” legislative changes and government interventions that other countries have implemented to deal with the “fragmentation” of their cash systems.
The central bank said it was “committed to the constant availability of cash as a means of payment” but indicated that that commitment was at risk as so-called “independent ATM operators”, which are unregulated, now essentially operate Ireland’s ATM network.
But the bill acknowledges that cash use has fallen to about two-thirds of its pre-pandemic level, from almost $20 billion to $20 billion.
“Nevertheless, cash remains an important means of payment and an important payment method for consumers across the euro area, including Ireland,” the document said.
Cash plays a critical role in ensuring the financial services needs of the vulnerable, the unbanked and those not digitally active are met, the bank said.
Asked if it has plans to ensure that unregulated cash distributors that operate ATMs are included in the regulatory grid, the Treasury said that the public consultation on the Retail Banking Review highlighted that Irish banks were disrupting the market for delivering cash would have left ATMs.
The department said the central bank’s submission will be reviewed by the Retail Banking Review Team and the draft Retail Banking Review report will be submitted to the Treasury Secretary in November 2022.
https://www.independent.ie/business/personal-finance/central-bank-could-regulate-operators-of-atms-amid-fears-over-access-to-cash-41898830.html The central bank could regulate ATM operators for fear of losing access to cash