AS WE HEAD into one of the busiest shopping weekends of the year, the issue of how consumers are allowed to pay for goods has come to the fore.
One side effect of the Covid-19 pandemic has been the rapid acceleration of the transition from physical cash to digital payments.
Many consumers say they’ve ditched coins and notes altogether and some businesses have even stopped accepting them. However, this has prompted fears that people who are unable to use digital banking will be isolated.
Statistics gathered by the Banking and Payments Federation Ireland show that Irish people made nearly 100 million more contactless payments in the third quarter of 2021 compared with the last quarter of 2019, just before the pandemic hit.
The amount spent in contactless transactions has also skyrocketed, increasing by over €2 billion, from roughly €1.7 billion to €3.8 billion.
The trend towards digital payments was already in train long before Covid-19, however fears that the virus could be transmitted by handling coins and notes led many to switch to digital only. The habit appears to have stuck even after research largely dismissed safety concerns about physical cash.
The banks also nudge people towards contactless and debit card payments by making them cheaper than ATM withdrawals.
With cash use dwindling, some businesses have stopped accepting it altogether. One of those is Tír Deli on Dublin’s Baggot Street, which decided to go card only in the early stages of the coronavirus outbreak.
Tír’s Shane Kelly told The Journal: “For us, cash takes a lot of time away from the business due to counting, security, deposits and processes. I have worked in a business before which had a full-time person dedicated to cash management.
Cash also creates health and safety concerns for our team due to Covid and break-ins.
Kelly said a very small number of customers have been annoyed by the move but, on the whole, it has gone very well. “We are definitely happy with the decision, overall.”
Another busy cafe in Dublin city centre said they accept cash but so few customers use it that they are happy when people do, simply because it can help keep the till topped up.
Perhaps the best example of the shift towards digital payments is Grogan’s Castle Lounge on Dublin’s South William Street. The famed pub eschewed card payments for years before finally bringing them in when Covid landed in Ireland.
“It’s actually been a breeze,” Daniel Smith of Grogan’s said. “Customers have been happy with the option, particularly in the age of Covid. We were actually somewhat surprised at how quickly a lot of long-time regulars moved over to paying with card, thinking there’d be some traditionalist resistance, but no.
“It’s been a great addition so far, particularly with the current restrictions of providing table service to all customers, [it] has saved many trips back and forth to the till to get change!”
Grogan’s still accepts cash for those who wish to pay for a pint and a cheese toastie the traditional way.
Is it legal for businesses not to accept cash?
The Central Bank, whose job it is to oversee payment and settlement systems in Ireland, has a very straightforward view on the issue.
It says that, while notes and coins are legal tender, retailers can refuse to accept them as long as they specify it in advance. This is part of the reason why businesses post signs saying that they only accept cash or only cards.
“Euro notes and coins have legal tender status in Ireland, however if a firm specifies in advance of a transaction that it will only accept payment by a means other than cash, it is not legally obliged to accept settlement of the payment obligation in cash,” a Central Bank spokesperson said.
Essentially, it comes down to a matter of contract law and the retailer is within their rights to decline to sell as they haven’t yet entered into a contract with the purchaser.
‘Discrimination’
While the legality is straightforward, some argue that not accepting cash discriminates against some people.
“Refusing cash for goods and services effectively discriminates against older persons and other social groups,” Celine Clarke of Age Action said.
Clarke said the advocacy organisation has been contacted by people who are experiencing difficulties accessing services because they do not use digital banking.
“Some people of all ages do not have debit or credit cards, or mobile phone based payments, either because they can’t open a bank account or don’t want to but older age is still the biggest indicator for who is digitally excluded.
“At least 65% of older people experience digital exclusion which means they are not using the internet or else do not have the skills or devices to safely navigate the Internet,” she added.
Age Action is encouraging businesses to be “age-friendly” and to be mindful that some older people only transact using cash.
“A digital first approach should not mean digital only – conventional cash payment should always be available to people to ensure that those who don’t have access to digital payments are not discriminated against,” Clarke said.
The comments were echoed by Dermott Jewell of the Consumers’ Association of Ireland, who told the Irish Examiner on Saturday that the government should ensure that shoppers always the option of paying with cash.
Speaking to The Journal, Jewell said: “We do not live in a cashless society. It is not a policy envisaged for Ireland and for good reason.”
“Of course, if a business decides not to accept cash, once that is well advised and made clear in advance of any purchase, then that is their entitlement. However, it is not necessarily in the best interest of their customers who rely on cash payments to pay their way.”
Jewell said there are numerous reasons that people may only be able to pay in cash. He added that Covid restrictions are impacting many consumers in a negative “and some would suggest, discriminatory” way.
“It will be important that, wherever possible, adherence to normal ways of doing business are maintained. And cash, for many customers, is a big part of that norm,” he added.
Plans from AIB, Bank of Ireland, KBC and Permanent TSB to create a new payments app, to rival platforms such as Revolut, are being investigated by the Competition and Consumer Protection Commission.
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