An Post to pick up over-the-counter bill payment services from the banks

The Government is expected to announce details of the transfer of over-the-counter bill payment services from the banks to An Post within the next week. This will mark the beginning of a two- to three-month transition period.

The alliance between the banks and An Post focuses on developing a national payments infrastructure that will let consumers make and receive payments electronically.

It entails moving time-consuming paper bill payment services from the banks to An Post, in tandem with developing further banking services for those who do not hold a bank account.

The initiative is part of the Government's National Payments Strategy and is part of a move to develop a more inclusive information society.

An objective of the banks/An Post link up is to ultimately provide a full range of electronic banking services for all income recipients. Only half the State's population has a bank account at present.

A national bill processing facility in Kilrush, Co Clare, will accept postal instructions from customers to pay their bills electronically.

An Post currently operates 1,911 post offices and sources close to the organisation say it will almost double its bill payment network by extending the bill pay service to retail outlets. An Post could not confirm this plan.

This could mean customers would be able to pay their utility bills over the counter at their local newsagent. It's expected that the An Post-run bill payments service will be free.

Customers paying bills online, by telephone banking, ATM or by direct debit will be unaffected by the new arrangements and banks will be actively encouraging these methods of payment. But any customers paying bills by cash will no longer be able to pay over the counter at a bank branch - An Post will take over this service completely after the transition period.

The changeover may cause some inconvenience to people set in their banking habits but will provide real benefits for consumers in the short and long-term.

An Post will benefit from new revenue streams from the utility companies and new sources of business from increased footfall in its branches. Customers wishing to pay their bills in cash will have access to more outlets for longer hours, six days a week.

The banks will not be sorry to lose the time-consuming work that processing paper transactions entails. In theory, staff will have more time to provide a higher level of customer service.

However, it is also possible that the scaling down of over-the-counter services might lead to cutbacks in staff and branch networks.

As the banks hand over paper bill-paying services, they are expected to step up the promotion of time-saving banking facilities, such as the laser card and cash-back facility.

In time, social welfare recipients will have access to similar debit card facilities in the move towards a predominantly electronic transactions system.

The new bill payment scheme is the result of two years of negotiations between An Post and the four main banks.

The idea of a universal account for Irish citizens was proposed to the Government by the Irish Payments System Organisation, which represents the banking industry, in December 1999.

Universal bank accounts do not have overdraft facilities or charges and would therefore operate at a loss. However, banks and the Government stand to benefit from the system as a reduction in paper-based transactions brings down costs and increases efficiency.

Uniquely, the interests of the consumer, the banks, An Post and the Government all seem to have converged in this new initiative. Bill payment is just the first step in an ambitious project and there is a lot to look forward to if the full objectives of the strategic alliance are realised.