State agencies set to stop handling cheques

The State has kicked off a marketing campaign to remind businesses that Government departments, local authorities and state agencies will no longer handle cheques from September 19th.

The so-called e-Day initiative was launched in September 2013, giving businesses one year to make alternative payment arrangements. This is part of the Government’s broader National Payments Plan (NPP) programme designed to encourage people to switch away from using cash and cheques.

The Government has said a switch to electronic transfers of funds by arms of the State would speed up payments to businesses. It has estimated that this could yield savings of about €1 billion across the economy, of which about one-quarter relates to reducing cheque usage to EU levels.

It is estimated that 61 million cheques will be used in Ireland this year, down from 69 million last year and 132 million in 2005. Businesses are expected to issue about 28 million this year, a reduction of 5 million on last year.

Ronnie O’Toole, programme manager for the NPP, said the number of cheques affected by the Government’s e-Day strategy would amount to a couple of million and the cost saving would be “relatively small”.

While the Government is moving away from handling cheques itself, this form of payment will not be banned. Businesses and consumers will continue to be able to write cheques well into the future.

Costs typically associated with cheques include stamp duty, bank charges, postage and labour costs associated with processing the cheques.

Mr O’Toole said Ireland has the second highest usage of cheques in Europe behind France.

Simon Harris, the minister of state at the department of finance, encouraged public sector bodies and businesses to “engage with each other and their banks to ensure a smooth transition to modern payment methods”.