The government is considering giving the Central Bank the power 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 companies due to a massive shift towards outsourcing by retail banks.
By the end of 2022, only 25% of the country’s ATM networks will be owned by the banking system, up from 100% in 2015.
Bank of Ireland and AIB have together sold 1,200 ATMs to unregulated operators over the past three years.
It has emerged that an ATM has been removed from the Dáil, with the operator claiming only €200 was withdrawn from it in a four-week period last year. Operator Brink’s told the Oireachtas it would continue to provide a serviced ATM only if it agreed to a four-year contract worth around €38,000, The Sunday Times reported.
In December 2020, Bank of Ireland sold 700 off-branch ATMs to Euronet, one of the largest ATM operators here.
At the time, Euronet had committed for three years not to introduce new charges for the use of distributors.
In 2018, Ulster Bank sold ATMs it operated as EasyCash in 400 stores in Ireland to Euronet.
AIB sold a network of over 500 off-branch ATMs to Brink’s in 2020.
This situation “poses challenges to access to cash for consumers”, the Central Bank said
At the time, Brink boss Doug Pertz promised that bank customers here “would receive the same level of service without incurring additional fees or charges when using our ATMs.”
In a submission to the Department of Finance’s retail banking review, the Central Bank said the sale of so many ATMs to unregulated operators meant that the distribution and execution of cash was now dominated by businesses that the Central Bank does.
This situation “poses challenges to access to cash for consumers”, the Central Bank said.
The submission, which was drafted ahead of last month’s furor over AIB’s decisions to cut cash services and remove ATMs from 70 of its branches, warns that the growing barriers customers face to access to basic banking services raise “significant social problems”.
AIB was forced to reverse its decision after a massive backlash. The bank had claimed there had been a 36% drop in cash withdrawals from ATMs.
The Central Bank’s submission document suggests that the department considers “helpful” legislative changes and state interventions that other countries have implemented to deal with the “fragmentation” of their treasury systems.
The Central Bank said it was “committed to ensuring the continued availability of cash as a means of payment”, but suggested that this commitment was at risk because so-called “independent ATM deployers”, who are not regulated, now primarily operate the ATM network in Ireland.
However, the submission admits that cash usage has fallen to around two-thirds of its pre-pandemic level, dropping from almost €20 billion in withdrawals in 2019 to just €13 billion in 2021 – and that cash use is unlikely to recover.
“Nevertheless, cash remains an important means and choice of payment for consumers in the Eurozone, including in Ireland,” the document states.
Cash plays a critical role in ensuring that the financial service needs of vulnerable people, those without bank accounts and those who are not digitally active are met, the bank said.
When asked if it plans to bring unregulated cash companies that operate ATMs into the regulatory network, the Department of Finance said that the public consultation on the review of retail banking pointed out that Irish banks have pulled out of the market for the provision of branch-type ATMs.
The department said the Central Bank’s submission is being reviewed by the Retail Banking Review Team and the draft Retail Banking Review Report will be presented to the Minister of Finance in November 2022.