Rónán Mullen (Independent)
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I welcome the Minister of State. He has just missed a very interesting Commencement matter on the subject of a basic income for artists. I was going to say that I hoped that the proposal I had not too long ago, that the loophole or the abuse of the artist's tax exemption, might help pay for such a basic income. However, that is not my matter here today.There should also be penalties for bad art. If we consider Agriculture House and what was there before it, it would make one wonder what some of our creative people get up to and how much of a debt we owe them.

On the subject of cash payments, one of the many changes Covid-19 has brought to our lives is the huge increase in payments by card, particularly contactless payment, rather than by cash. Those who would never have dreamt of paying for small amounts by card now happily tap for convenience. We are all carrying far less cash than we did two years ago. According to the main banks, automatic teller machine, ATM, withdrawals are down approximately one third compared to 2019 and card payments are up approximately one fifth. This is positive in some ways. Not only is it more sanitary but it reduces the amount of cash that gets lost or that can be stolen, as well the security costs for banks and businesses of transporting it.

However, there are significant downsides. The Consumers' Association of Ireland, CAI, warned recently that there is an increasing trend whereby businesses, in many cases, retail businesses, are now refusing to take cash and will only accept payment by card. This poses serious problems for many citizens, particularly people on limited budgets, low incomes or social welfare. Older people, not all but many, are culturally adapted to using cash and it helps them to manage their household budget. We always encourage people of whatever age to keep their savings in banks and not to keep large amounts of cash in their homes, particularly in the wake of the horrific robberies we have heard about recently.

In response to the CAI's comments, the Irish Independentstated the position of the Central Bank to be: "Consumers will continue to be able to use cash and will not be forced to use electronic payments." However, that just does not seem to be the case. As we know, there is often a big difference between what State agencies say and what the law actually provides. The Minister for Finance recently outlined to Deputy Nolan the legal position on this, which is:

If a business specifies in advance ... that payment must be in a form other than cash, the customer cannot subsequently claim a legal right to pay in cash. Therefore, under certain circumstances, retail businesses or service providers can refuse to accept payment in cash.

I wonder whether that recent statement by the Minister completely undercuts the position of the Central Bank.

I would like to draw the attention of the House and of the Minister of State to the European Commission 191/2010, on the scope of legal tender of euro banknotes and coins signed by Mr. Ollie Rehn. He was a regular visitor to those shores a decade ago, and by the sounds of it he liked to pay for things in cash while he was here. The recommendation states:

The acceptance of euro banknotes and coins as means of payments in retail transactions should be the rule. A refusal thereof should be possible only where (for example, the retailer has no change available)."

A recommendation is not binding law, as we both know, but it is a statement of best practice and Ireland, clearly, appears to be diverging from it.

I would be grateful if the Minister of State could clarify the right of people to use cash for payments? Can they insist on doing it or not? Is this issue currently governed by statute or it is a simple matter of contract under common law? Which recent statement on this was correct: that of the Minister or the position of the Central Bank? How do we reconcile the contradiction? What is the position of the Government on the Commission recommendation, to which I referred, on the scope of legal tender of euro banknotes and coins? I do not think we are in compliance at present. Should we be looking at ways to amend consumer law to allow citizens to pay for goods and services in cash if they wish to do so, or in almost every circumstance, to ensure that business cannot refuse cash in any blanket, capricious or arbitrary fashion? Perhaps at least in area of small retail transactions, this needs to be regulated.

Thomas Byrne (Meath East, Fianna Fail)
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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.

Rónán Mullen (Independent)
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I thank the Minister of State for his reply. It is very comprehensive except to the extent that it does not specify what the Government's view is on what is happening. It is quite clear that non-acceptance of cash should only be in exceptional circumstances if the retailer has no change available. It cannot be the case that one could be in compliance with the recommendation if one never has any change available. The Minister of State has rightly set out the contractual position but the question is: ought it to be the law that businesses should always be ready to accept cash and only in exceptional circumstances where they have no change should they be allowed to refuse it?

I have a certain suspicion that it suits the Government to allow people to be gently pushed towards payment by card. It reduces the potential for the black economy and the under-reporting of transactions. Certainly, the increase in card payments is surely linked to the very impressive VAT returns for 2021, which exceed the VAT returns for 2019, which is incredible when we consider large sections of the economy were shut or restricted during 2021. However, we should not use the behaviour of a small section of society who engage in the black economy to penalise law-abiding consumers who wish to use cash, particularly vulnerable customers. If we keep the focus on the customer, particularly the vulnerable, should the Government not move to legislate in this area to create a requirement that in all but exceptional, undesired and accidental circumstances, cash would have to be accepted?

Thomas Byrne (Meath East, Fianna Fail)
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I again thank the Senator for raising this issue. Certainly, it is an important matter for consumers, businesses and the State, as alluded to by him. The Commission recommendation is in place but, as he agrees, it is a recommendation and not a legally binding law. Retail businesses under current law can refuse to accept payment in cash, once people are told beforehand.

I am not the Minister for Finance but I do not know of a legal impediment for the Senator to bring forward Private Members' legislation on the issue. I assume that would not be in breach of European law because the recommendation is in place. In fact, what he is proposing would be in line with the recommendation. However, as a matter of current law and the Government position, I have set that out in this reply.

Rónán Mullen (Independent)
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Would the Minister of State take a suggestion back to the Government that it might use its ample amount of Government time to legislate in this area?

Thomas Byrne (Meath East, Fianna Fail)
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I certainly will pass that on to the Minister.

Rónán Mullen (Independent)
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I thank the Minister of State for that.