Cash dependence 'not justifiable'

Ireland is in a time warp and is both wasting money and losing ground on competitors because our payment behaviour continues to rely heavily on cash and cheques, a conference on payments was told yesterday.

Irish Payments Service Organisation (IPSO) chief executive Stewart MacKinnon told the first National Payments Conference that cash usage in Ireland was more than double that of our European peers. He also said that Ireland was one of only three euro-zone states using cheques to any significant extent.

Some 70 per cent of all payments less than €100 are made in cash, which is the most expensive of all payment mechanisms, said Mr MacKinnon. Almost one-third of Irish consumers still use cash for all their transactions.

"Despite having an abundance of proven secure electronic payment options available, we are continuing this love affair with cash that is costing us as much as €1.6 billion a year. As we now face into the introduction from early next year of the Single Euro Payments Area, Irish consumers and business alike have to get used to the idea that this dependence on paper to make payments is no longer justifiable," he said.

Irish people continue to write 130 million cheques a year and there are a further 50 million pieces of credit paper in the payments system, according to IPSO. But business remains the biggest culprit in the continuing use of cheques.

IPSO's Barry O'Mahony said Government stamp duty on credit cards was hindering progress on electronic payments, he said. "We have been calling for the elimination of stamp duty on the grounds of infrastructure - it curtails the move towards more electronic forms of payment and for most consumers moving away from cash, the obvious place to go is cards and stamp duty on cards here is crazy," said Mr O'Mahony.