Irish consumers making the switch from cash to electronic payment

IRELAND still trails its European counterparts in terms of paying for goods electronically, but a survey shows we are slowly cottoning onto the benefits of switching from cash.

The study by the Irish Payment Services Organisation (IPSO) shows that debit cards are beginning to replace cash on a meaningful basis, as consumers alter their payment habits.

The organisation claims that more efficient and cost-effective methods of payment — from debit cards to online transactions — are becoming increasingly vital, given the current economic climate, and a significant shift could end up boosting the Irish economy by around €1 billion per year.

“The fact that there’s a clear trend towards greater usage of debit cards is a sign that Ireland is embracing a new era in consumer transactions and it will come as a boost to retailers and businesses across the country as the speed and efficiency of payments improves,” said the payments’ organisation’s chief executive, Pat McLoughlin. “It’s essential that Irish consumers continue to take the lead from their European counterparts in switching to more efficient payment methods as this will positively impact on Ireland’s economic competitiveness.”

Ireland however, remains one of the highest users of cash in the EU. Even though the value of cash withdrawals from ATMs dropped by over €3bn (to €22.3bn) last year. More people here may be registered for online banking services and paying for goods electronically, but 36% of transactions were on a non-cash basis last year; compared to an EU average of 96%.

Irish consumers use ATMs more than people in any other EU country, but a definite shift is evident. Last year marked the first time that the total spend on cards exceeded the value of ATM withdrawals, and figures for the first half of this year suggest the trend is continuing.

IPSO recently reported that Irish consumers made just under 11 million online payments in the first quarter of this year, pointing to an annualised increase of 17.3%.