Ireland’s minister of finance, Michael McGrath, said: “We have to ensure that people are not left behind and we must avoid the risk of financial exclusion.

“We must recognise the important role that cash continues to play in all our lives, and this is a role I am determined to protect.”

Third-party companies operating ATMs may need to have €10 or €20 notes available as the Central Bank will have powers to set and impose rules on them.

Campaigners from the Payment Choice Alliance welcomed the move, and urged the UK Government to consider similar measures.

Martin Quinn, director at Payment Choice Alliance, said: “We welcome the Irish Government plans to mandate cash acceptance for essential services like groceries and medicines through small stores and pharmacies.

“It’s about time the UK Government also looked at passing a Payment Choice Act here across the United Kingdom which would allow the 90 per cent of the British public to spend their cash when and where they please.”

Mr Quinn added: “With a General Election approaching later this year, this is a no-brainer and a definite vote winner for the Prine Minister, which would give Rishi Sunak an instant lift in the polls and would prove immensely popular amongst Tory voters.”

Cash usage across the UK has grown for the first time in a decade, according to a report published by the British Retail Consortium (BRC) last month.

The annual Payments Survey report found cash usage grew from 15 per cent of transactions in 2021 to just under 19 per cent in 2022.

Hannah Regan, payments policy adviser at the BRC said: “We are now seeing a return to many of the pre-pandemic trends in payments, including smaller but more frequent purchases, and a slight return of cash payments.”

However, the ongoing trend of bank branch closures across the UK is continuing to cause concern regarding access to cash.

Last month, the FCA set out new rules to maintain reasonable access to cash for personal and business customers in an increasingly digital world.