Ireland prepares for payments overhaul
16 July 2010 | 12460 views | 1
The Irish government has agreed to the creation of a high level group that will establish a National Payments Implementation Plan (NPIP) designed to wean the country off its dependence on paper-based cash and cheques.
The bank-backed Irish Payments Services Organisation (Ipso) says cheques and cash usage dropped dramatically in 2009, but remain way above EU norms.
The year saw an 11.5% drop in the value of cash withdrawn from ATMs and a 13% decline in the volume of cheques.
Despite this, Irish citizens recorded an average sum of €5,644 in cash withdrawals per annum per person - the highest cash figure in the EU and more than double the European average.
And while cheque volumes have declined, cheques still account for 66% of the value of all noncash payments in Ireland versus an EU average of only three percent.
As a proportion of all payments, electronic alternatives to the cheque, such as credits and direct debits, now account for about 41% of all non-cash payments. However, in value terms these electronic payments account for only 30%. This compares poorly against EU averages which, in 2008, were 54% of volume and 96% of value.
Pat McLoughlin, chief executive, IPSO says the drafting of a national strategy to move away from cash and cheques is essential if Ireland is to remain competitive with its EU counterparts.
A special NPIP Advisory Group made its final report to the Minister for Finance in 2009 in which the establishment of a high level group to prepare and implement a National Payments Plan was recommended. The Minister accepted the recommendation and it is expected that the group will be established and the National Payments Plan will be prepared and agreed in 2010.
Says McLoughlin: "Businesses now have to plan and prepare to update legacy, cheque-based accounting processes with electronic ones. Apart from being faster, more secure and more cost-effective, modern, electronic payment systems give the beneficiary certainty of payment, particularly important in these difficult, economic times."