Cheques decline as contactless payments become the new norm

Ireland is now one of only a handful of countries worldwide where cheques are still regularly used
Cheques decline as contactless payments become the new norm

Figures from the BPFI showed a strong recovery in the value of contactless payments in May as spending reached almost €600m.

Time was when getting your first chequebook represented an important step on the road to maturity and adulthood. This is an era clearly at an end due to cheques having experienced a 45% falloff since 2016 as consumers continue to flock toward electronic payments. 

The latest figures from Banking & Payments Federation Ireland show that cheque usage continued to decline in Q1 2020 with 6.6m cheque payments, a 15% reduction from 7.8m in Q1 2019, and from 12m in the first quarter of 2016. 

Cheques have declined as both business and consumers move to electronic payments, with an ever increasing reliance on cards to pay for shopping, both online and in store. A recent consumer survey commissioned by BPFI showed that only 2% of consumers prefer to pay a bill by cheque, while only 4% prefer to donate to charity by cheque. 

“Given the fast-changing nature of consumer preferences away from cheques and towards electronic transfers, cards and mobile banking, these figures are not a surprise,” said Gill Murphy, Head of Payment Schemes, BPFI. “This continued drop in cheque usage by consumers is a trend we expect to see continue as consumers and businesses are provided with more choice and convenience regarding payment methods.” At the same time, however, 6.6m cheque payments Q1 2020 is not insignificant and demonstrates that some consumers and smaller businesses in particular are in no rush to shred their chequebooks just yet. 

“The challenge for us is to try to ensure that there is a full awareness of what the alternative options are and the potential benefits of those options for both consumers and businesses.”

Ireland is now one of only a handful of countries worldwide where cheques are still regularly used, including Canada, Cyprus, France, Portugal, Singapore, the UK and the US, based on figures from the European Central Bank and the Bank for International Settlements. Both Ireland and the UK have seen substantial falls in cheque usage in the past decade, with Irish cheque usage per capita down from 22.1 in 2009 to 6.4 in 2019. 

Figures from the BPFI showed a strong recovery in the value of contactless payments in May as spending reached almost €600m, the highest monthly total to date. On average consumers made €19.3m worth of contactless payments per day during May, up 7% on figures in February before Covid-19 hit. In volume terms, contactless payment usage was 1.25m, down from 1.51m ‘taps’ per day in February. While this is unexpected due to the lockdown and restrictions on movement during March through to mid-May, overall the figures indicate that consumers are spending more than before through contactless payments with the May figures accounting for the highest value on record this year.

Brian Hayes, chief executive BPFI. Picture: Naoise Culhane
Brian Hayes, chief executive BPFI. Picture: Naoise Culhane

The uplift in retail and hospitality spending should signal further growth in contactless volumes, which is further supported by research showing that 92% of all adults have now used contactless payments, with one third opting for contactless as their preferred method of payment in cafes and over a quarter preferring it for grocery shopping.

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