He said the allowable cost would be set by a third party such as the independent economic consultancy NZIER.<\/p>\n
Armourguard chief executive Shane O’Halloran. Photo \/ Supplied<\/p>\n
The NZBA\u2019s request for dispensation to negotiate as a group is an effort to push back on this plan.<\/p>\n
If Armourguard gets its way, the lion\u2019s share of the cash infrastructure cost would be borne by ANZ, Westpac, ASB, BNZ, and, to a lesser extent, Kiwibank (the cost would be apportioned based on banks\u2019 net assets).<\/p>\n
The effect would be that Armourguard\u2019s smaller cash customers would effectively be subsidised by its largest.<\/p>\n
All Armourguard customers including banks, independent ATM providers and merchants would also pay a \u201crate card\u201d fee for service.<\/p>\n
O\u2019Halloran said the largest banks should be substantially liable for the basic infrastructure cost of keeping cash in the system because they are key beneficiaries and gain the most from retaining a healthy system for cash distribution, and because they have deep pockets and can afford it.<\/p>\n
The infrastructure cost covers the likes of basic labour expenses, vans and machinery, O\u2019Halloran said.<\/p>\n
He said that if the company was to spread all of its costs more equally across customers it would have the effect of driving a significant number away from accepting cash, which, in turn, would exacerbate a problem of shrinking cash use.<\/p>\n
NZBA chief executive Roger Beaumont. Photo \/ NZME<\/p>\n
The bankers respond<\/p>\n
NZBA chief executive Roger Beaumont cast the circumstances differently. In an emailed statement he pointed out that Armourguard is a monopoly provider of full suite cash-in-transit services.<\/p>\n
\u201cThis means there\u2019s no competition to keep Armourguard\u2019s prices or service standards in check,\u201d Beaumont said.<\/p>\n
\u201cIf we continue as we are now, the likely result will be reduced reliability, slower response times, and a general decline in the overall quality of cash-in-transit services \u2013 posing a real risk to the future viability and reliability of this service. That\u2019s why we\u2019ve approached the Commerce Commission. <\/p>\n
\u201cIf cash-in-transit customers can work together to negotiate with Armourguard, we have a better chance of making sure cash is available to people who want it.\u201d<\/p>\n
The backdrop to the dispute is a heavy decline in the use of cash in New Zealand and falling demand for cash-in-transit services. The trend accelerated during the Covid-19 pandemic, and has also been exacerbated by a decline in the number of bank branches and ATMs.<\/p>\n
Continued widespread acceptance of cash across businesses is generally viewed as a public good, and especially beneficial for the poor and the elderly.<\/p>\n