National Payments Plan Implementation

Dáil Éireann Debate, Tuesday - 6 November 2018

Tuesday, 6 November 2018

Ceisteanna (204, 205)

Michael McGrath

Ceist:

204. Deputy Michael McGrath asked the Minister for Finance the actions delivered upon in the National Payments Plan 2013; when the steering committee last met; the measures put in place to ensure the continued progress of digital payments here; and if he will make a statement on the matter. [45409/18]

Michael McGrath

Ceist:

205. Deputy Michael McGrath asked the Minister for Finance the progress made to date on the recommendations included in the National Payments Plan 2013 in each of the years 2013 to 2017 and to date 2018, in tabular form; and if he will make a statement on the matter. [45410/18]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 204 and 205 together.

The National Payments Plan, intended to modernise Ireland's payment system, was published in 2013 and covered the period up to 2015. It set out a vision for payments, including universal acceptance of electronic forms of payment, robust and reliable payment systems, and migration from cash and cheques to cards and electronic payments. The table below sets out the NPP recommendations and the status of implementation:

Recommendation	Status	Comment
Facilitate interoperability of mobile based payments	Ongoing	Technological developments in recent years have greatly facilitated the development of interoperable mobile based payments and increased the number of solutions available to consumers
Introduce contactless debit cards	Achieved	Banks have issued contactless cards and usage is increasing rapidly
Develop public and private sector e-Payments acceptance plans	Ongoing	E-Day initiative in September 2014
Require taxis to take payment cards	Ongoing	Acceptance by taxis has increased significantly, aided by new technology
Introduce a Standard Bank Account	Achieved	Payment accounts with basic features were introduced in 2016 with the transposition of the Payment Accounts Directive
Progress Social Welfare Payments Strategy	Ongoing	The Department of Employment Affairs and Social Protection has a strategy to implement greater electronic payments
Incentivise the consumer to use e-Payments	Achieved	Stamp duty was reformed in Budget 2016
Incentivise the merchant to accept card payment	Achieved	Reduction in interchange fees together with the introduction of contactless cards have greatly improved the attractiveness of cards for retailers
Phase out stamp duty on debit and pre-paid cards	Achieved	Stamp duty was reformed in Budget 2016
End date for cheque usage between Government and business	Achieved	E-Day implemented in September 2014
Implement bank cheque migration initiatives; re-presentation of unpaid cheques to be stopped; modernise'Client Account' payments practices	Ongoing	Cheque usage has steadily declined. The number of cheques used has halved in less than six years. Per capita cheque usage in Ireland is now 8 a year (compared with 237 e-payments), and usage is falling by 10 per cent a year
Prepare review of the Irish cash cycle	Achieved	Central Bank National Cash Forum regularly reviews
Increase dispensing of €10 notes in ATMs	Achieved	Targets set in NPP met and the Central Bank set additional targets to end-2018
Pilot discontinuing use of 1c/2c coins	Achieved	Following a successful pilot in Wexford in 2013, voluntary rounding was rolled out nationally from October 2015
Ireland to have fully migrated to SEPA	Achieved	Ireland fully migrated to SEPA in 2016, within the regulatory timeline
Support a broad education and support campaign to drive a change in payment habits	Achieved	Industry coordinated a ‘cashless Cork’ initiative. Advertising has contributed to a large rise in electronic payments generally, and contactless payments in particular

Under the National Payments Plan, Ireland made significant progress including full migration to the Single Euro Payments Area (SEPA). Rounding of 1c and 2c coins was rolled out nationally from October 2015 and has been generally welcomed. All of the major banks now issue debit cards, most of them with contactless capability, and the contactless payment limit is now €30. The latest Banking and Payments Federation Payments Monitor shows that in the first half of this year, contactless payments grew by 66% year-on-year in both volume terms and value terms.

In December 2015, interchange rates were reduced to make card acceptance more attractive for retailers. Stamp duty on debit cards was reformed with the effect that stamp duty was removed and replaced with a 12c charge per ATM transaction. The implementation of 'e-Day' by Government in September 2014 – from which time Government Departments, Local Authorities and State Agencies no longer routinely use cheques in their dealings with businesses - resulted in a significant decrease in cheque volumes. The Banking and Payments Federation reports that cheque usage continues to fall, with for the first half of 2018 down 10.3% year-on-year.

The measures recommended under the National Payments Plan were designed to ensure that the payments environment facilitates increased adoption of more efficient payment methods. They should not be seen in isolation. The EU is working to create a single market for payments across the Member States and my Department has led on transposing EU measures on payments. The Payment Accounts Directive was transposed in September 2016 and it ensures access to a payment account with basic features for anyone who does not have a payment account, one of the recommendations contained in the National Payments Plan.

The revised Payment Services Directive (PSD2), transposed in January 2018, further opens the EU payment market for companies offering consumer or business-oriented payment services based on access to payment accounts and ensure a level playing field for both existing and new players.

The Deputy may be interested to know that the Central Bank recently established a forum on retail payments, where payment services providers and payment services users can come together to engage in an open and constructive dialogue with each other in relation to Irish retail payment services generally.

The Deputy may also be interested to know that my Department earlier this year commissioned research to benchmark payments in Ireland, and that I expect to receive a report on this in the coming months.