Latvijas Banka, Finance Latvia Association and the commercial banks with the widest network of ATMs and branches – Swedbank AS, AS SEB banka, the Latvian branch of Luminor Bank AS and AS Citadele banka – have agreed to continue implementing the measures ensuring access to cash for residents of Latvia in 2024 as well. These measures have been included in the Memorandum of Cooperation signed in autumn 2021 and now updated for the second time.
Following up on the implementation of the Memorandum, its signatories agreed on the following course of action:
- preserve the ATM network outlined in the Appendix to the Memorandum and available on Latvijas Banka's website bank.lv until 1 January 2025 with an additional restriction, i.e. to dismantle no more than 5% or 17 ATMs in Riga as well as to relocate no more than the same number of ATMs from Riga to territories outside Riga;
- ensure that every municipal centre has at least one ATM;
- ensure that the currently set number of critical ATMs (99), which are supplied with cash first in the event of a crisis, is preserved;
- when maintaining the ATM network, bear in mind that the straight-line distance from any location in Latvia to the closest ATM does not exceed 20 kilometres overall, thus ensuring access to cash for 99% of Latvia's population;
- ensure adequate actual accessibility of ATMs to consumers (at least 12 hours a day).
Cash still retains its role in day-to-day payments. Along with non-cash payments, it is an additional element of economic security in the current geopolitical conditions. The European Union and Latvian legislation clearly provides that cash will remain legal tender, with several restrictions on the use of cash introduced in association with the measures to reduce the shadow economy and money laundering. The drafting of the legal acts that will, in addition to the national initiatives, strengthen the role of cash in the entire euro area is ongoing on a European Union level.
Ensuring withdrawal of euro banknotes, ATMs are currently the main sources of the population's access to cash in Latvia.
There were 902 ATMs in Latvia upon the signature of the Memorandum in 2021 (894 of those were maintained by the signatories of the Memorandum). Over two years, their number has decreased by only 1.7%, and in mid-November 2023, there were 887 ATMs in Latvia (882 of those maintained by the signatories of the Memorandum). The updated Memorandum projects that the number of ATMs maintained by its signatories will fall by 3.3% (to 853) in the first half of 2024. This is mainly related to the request of one market participant (taking into account the requirements of its external service provider and the pressure from rising costs) to make the ATM locations more efficient. The Memorandum also stipulates an additional restriction for all its signatories, i.e. to dismantle no more than 5% or 17 ATMs in Riga as well as to relocate no more than the same number of ATMs from Riga to territories outside the capital.
At the same time, given the role of financial services, including ensuring access to cash, in the event of a potential threat or crisis, a range of critical financial services has been established in the country. Cash payments represent one of such critical services. To ensure access to cash as a critical financial service, a network of 99 critical ATMs which are supplied with cash first in the event of a crisis is currently established in the country. The framework for critical financial services, updated in October of this year, defines additional requirements for these ATMs to ensure their operation in case of a disrupted power supply and unavailable data transmission services (for the introduction of this requirement, a transition period has been set until 1 January 2025). The signatories of the Memorandum have agreed that the number of critical ATMs in the country will not be reduced at least until 1 January 2025.
More detailed information on critical financial services, including the map of critical ATMs.
According to the population survey conducted by Latvijas Banka and SIA Latvijas Fakti in August 2023, 86% of Latvia's population are satisfied with their possibilities to withdraw cash from their bank accounts, 9% are not satisfied, and 3% do not use cash in their payments.
"Digital technologies have seen a particularly rapid development over the most recent years and it will be even faster in the future, thus helping Latvia strengthen its international competitiveness, yet the circulation of cash also has its own role in the economy to ensure daily access to adequate amounts of cash to be used at the discretion of bank customers. The Memorandum incorporates the core cooperation principles to ensure access to cash previously adopted by the Finance Latvia Association. From now on, more work should be dedicated to awareness raising, providing information and compatibility of various solutions used by banks, in order to ensure a constant modernisation, export capacity and fair competition among banks and other financial service providers, limit the circulation of illegal cash and reduce the shadow economy", highlights Sanita Bajāre, Chairwoman of the Board at the Finance Latvia Association.
"Since the conclusion of the Memorandum in autumn 2021, the geopolitical situation has changed significantly, thus imposing additional requirements for access to financial services, including cash. Cash represents a cornerstone of economic security and is incorporated in various risk scenarios of the country, " indicates Jānis Blūms, Head of the Cash Department of Latvijas Banka.
"We have been forward-looking in taking timely care of strengthening the role of cash. I would like to thank the financial sector for its readiness to voluntarily assume obligations in the area of access to cash. However, the number of ATMs in the country is continuously, albeit slowly, decreasing in the new circumstances as well. To ensure cash infrastructure sustainability and access to cash, we are working on consolidating the role of cash and the requirements for access to it in the country with a law that would take effect as of 1 January 2025."