On 15 October 2024, the Minister for Finance, Jack Chambers, launched the National Payments Strategy for Ireland (Payments Strategy), which considers payments-related matters, including the continuing role of cash in society, payment resilience, fraud and the future of payments.
The Payments Strategy is underpinned by a multi-faceted examination of payments in Ireland. In his related statement, the Minister referred to the evolution of the payments landscape in Ireland over the past 10 years since the last review was conducted. He highlighted the increased use of digital payments and a decline in the use of cash for everyday payments as key changes. The purpose of this payments review is to ensure the payments ecosystem is fit-for-purpose and operating in the interests of consumers and small businesses. There is also a focus on inclusivity for all members of society and that digital-first is never digital only.
Ireland strongly welcomes digitalisation and innovation in payments. The Minister acknowledges that Ireland hosts a vibrant and diverse payments sector, ranging from traditional banks to fintech providers, providing services to Irish and European Union markets. He also highlights that "to ensure the Irish economy benefits from the advantages of emerging technologies and payment methods, while also taking into account the need to ensure the continued availability of more traditional forms of payments, the Payments Strategy sets out a vision for the future of payments in Ireland".
Our Financial Regulation team examines below some of the key aspects of the Payments Strategy and the vision statements driving it.
Payments Strategy
The Payments Strategy is informed by views from various actors in the banking and payments ecosystem, civil society and regulatory bodies. It aims to "enhance and build public trust in and the effectiveness of the payments system", based on the following four interlocking principles:
- Access and Choice – promoting reasonable options for consumers and small businesses;
- Security and Resilience – of the payments system and system operators;
- Innovation and Inclusion – a future focus that enhances interoperability and inclusion; and
- Sustainability and Efficiency – solutions that have regard to cost/benefit and the environment.
Vision statements
- Consumers in Ireland will be able to use the most modern features and functionality available for payments while retaining options for those who prefer more traditional means of payment.
- The Irish payments ecosystem will evolve because of proactive participation by market players so that the Irish payments system will keep pace with the European payments market and offer a similar experience to Irish consumers.
- Irish consumers will have the utmost trust in the reliability of their payment methods and will freely adopt new payment methods without fear of being defrauded.
- By 2030, there will be greater transparency and understanding of the Irish payments landscape with insights into the trends and use of payment types.
Future Outcomes
The four vision statements are broken down into more detailed future outcomes and followed by actions required to achieve these future outcomes.
The role of cash / cash accessibility
- All government departments and bodies under their aegis shall accept electronic payments and cash payments (or facilitate cash payments). Actions include capturing where a public body levies fines or fees or where it provides goods or services for a charge, related future contracts and updating the Public Financial Procedures handbook.
- All sectors of the economy will be aware of the forthcoming EU legal tender regulation and their obligations regarding mandatory cash acceptance (if applicable), along with potential changes they may need to make to accommodate this and any other relevant issues arising from the regulation. Actions include developing a stakeholder information initiative to inform stakeholders of how (if any) changes in the law may affect businesses and highlight any changes they may need to make to their business operating model.
- A comprehensive overview of the national cash cycle environment will inform policy decisions regarding cash and payments. Actions include the Central Bank of Ireland (Central Bank) completing and publishing a report on the national cash cycle.
Resilience of payments
- Appropriate system-wide contingency arrangements will be in place to prepare for and manage disruptions to payment services. The Financial Stability Group, through its crisis preparedness subgroup, will continue its work in this area.
- The Central Bank will have appropriate powers to ensure relevant firms (e.g. payment firms) leave the market in an orderly manner. The Department of Finance will look at providing the Central Bank with relevant liquidation powers in respect of payment firms and make recommendations by the end of June 2025.
- A safe and easy-to-use EU-certified wallet digital identify will be available. By the end of 2024, the Irish State will provide a digital wallet allowing consumers and small businesses to securely authenticate their identity when accessing public services. Over time, further credentials will be added to the wallet to enhance its utility while ensuring the highest standards of privacy.
Payment Fraud
- There will be greater anti-fraud information sharing in the Irish banking sector. For example, the Department of Justice will legislate for a shared fraud database, which the Banking & Payments Federation Ireland (BPFI) will develop.
- Illegal online content flagged by the financial services industry will be prioritised for review by online platforms. To this end, the BPFI will apply for 'Trusted Flagger' status with Coimisiún na Meán (the regulator for broadcasting and online media) and, with the support of its members, aim to use this status to help identify and flag illegal online content to the relevant online forum.
- Consumers will be less vulnerable to fraud via telecommunications channels such as telephone texts and SMS messages. Actions include the exploration and evaluation of interventions to tackle SMS scams by the Department of the Environment, Climate and Communications and the Commission for Communications Regulation.
- Technology, financial services and telecommunications sectors and their respective regulators will cooperate more closely in combatting payment fraud. The BPFI will build on its existing Banking & cross-sectoral forum, the BPFI Financial Crime Roundtable, and extend its membership to include online platforms, financial services providers, telecommunications services providers and their respective regulators (the Central Bank, ComReg and Coimisiún na Meán).
- There will be greater awareness of fraud and fraud prevention among Irish consumers, for example, through the further development of fraud awareness campaigns.
- Consumers will be more aware of the risk of payment fraud including that committed via telecommunications, financial services and/or online platforms.
Account-to-account payments
- At least one 'pay by account' solution as a convenient and trusted alternative to cards and cash will be available. The Irish Retail Payment Forum (IRPF) will establish an Account-to-Account Working Group, with representation from banks, payment providers, open banking providers, merchants and others deemed appropriate by the IRPF.
- Irish payment service providers will have a greater awareness of open banking and account-to-account services. The Fintech & Payments Association of Ireland will play a key role here.
The future of payments
- Stakeholders will be more aware of best practices and areas of opportunity across the payment ecosystem regarding sustainability. The IRPF will play a key role here.
Data collection, analysis and sharing
- There will be greater transparency and understanding of the Irish payments landscape with insights on trends and usage of payment types. As regards certain payment-related matters, the Central Bank will lead a research and insights programme in partnership where relevant.
Parallel EU legislative initiatives
In tandem with the launch of the Payments Strategy, Ireland is involved in some ongoing EU legislative initiatives (e.g., the European Commission's proposals on the legal tender of euro banknotes and coins, on the digital euro, and for a payment services regulation and directive). Actions proposed as part of the Payments Strategy are aligned to and supportive of initiatives underway at the European level. For further information, please see our articles on legislative proposals regarding the digital euro here and here, and PSD3/PSR here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.