Thomas Byrne (Meath East, Fianna Fail) | Oireachtas source

Before I respond, I echo what the Senator said about the advice to people not to keep cash at home, notwithstanding the issue with the legal status of cash he has raised, because it is not safe and there are rules and provisions for bank accounts to be opened if people do not have them.

I thank him for raising this issue. It is 20 years this year since we as Europeans held a brand new currency in our hands - the euro. The changeover from 12 national currencies to the euro was a one-of-a-kind operation in history: the European Central Bank, ECB printed 15 billion euro banknotes and 52 billion coins were minted at that time. Over the past decade, we have seen a shift in the way consumers and businesses pay and bank. While historically Ireland has been a relatively cash-intensive economy significant progress has been made and there has been a rapid increase in the take-up of electronic payments.

Under the European Union payment accounts directive, which was transposed into Irish law in 2016, all Irish banks must make available a basic bank account for people who currently do not have a bank account. The basic bank account is free of charge for everyday banking services for the first year.

As the Senator said, the Covid-19 pandemic has also acted as a catalyst for the move towards digital payments and the move away from cash. The most recent Central Bank of Ireland statistics on debit and credit cards, published at the end of January, highlights that in December 2021 the volume of ATM transactions was 2% lower than compared to December 2020 but 31% lower than December 2019.

Notwithstanding a significant increase in the take-up of electronic payments, cash remains a vital part of the Irish payment system. A study, conducted by the Department of Finance in 2018, concluded that a fully cashless society would not be an appropriate objective.

In September 2020, as part of the EU digital finance package, the European Commission published the retail payments strategy. One of the key aims of the strategy is to maintain access to, and acceptance of, cash across member states. The strategy recognises the importance of ensuring there is continued access to cash and the increased use of digital payment methods does not lead to the type of financial exclusion to which the Senator referred.

In accordance with Article 128 of the Treaty on the Functioning of the European Union and Council Regulation No. 974/98 of 3 May 1998 on the introduction of the euro, euro notes and coins have the status of legal tender in euro area member states, including Ireland.

The Senator referred to Commission recommendation 191/2010 on the scope of legal tender of euro banknotes and coins, which provides the acceptance of euro banknotes and coins as means of payment in retail transactions should be the rule but that a refusal thereof should be possible in certain circumstances, for example, if the retailer has no change available. However, as the Senator said, the Commission recommendation is a recommendation and not a binding legal requirement.

Retail transactions are governed by contract law in Ireland and, in this context, where a business places no restrictions on the means of payment it is prepared to accept, it must accept legal tender when offered by a customer to settle a debt that has arisen. However, if a business specifies in advance of a transaction that payment must be in a form other than cash, the customer cannot subsequently claim a legal right to pay in cash, even if that cash is legal tender. This can be achieved, for example, by displaying signs at the till or at the store entrance. Therefore, under certain circumstances, retail businesses or service providers can refuse to accept payment in cash once they have advised the consumer in advance of the transaction.