Report reveals spending trends

HAI attended the second Banking and Payments Federation of Ireland (BPFI)’s Payments Monitor, after attending its first in Q4 2017. Released every six months, the Payments Monitor provides a comprehensive snapshot of the various means of payment executed across Ireland. The report comprises a combination of data provided by member banks to the BPFI and data published by the Central Bank of Ireland, including the use of card payments, cash payments, online payments like direct debits and credit transfers, and cheques. Here’s a summary of the latest findings.

Key Trends

There’s continued growth in digital payments, with digital banking transaction volumes growing by 27.3% year-on-year to almost €46m in the second half of 2017 (H2 2017). 71% of people using the internet use digital banking. Conversely, an ongoing decline in paper-based transactions (cheques) has been noted, down 9.7% year on year in H2 2017. Similar to last edition’s results, these trends reveal the continuing move from traditional paper-based transactions to online/digital payment activity.

Contactless usage – Strong contactless adoption – 109% YoY growth. 1 in 4 card transactions •  H2 2017 value at almost €1.6bn Vs €0.75bn in the same period 2016 •  Contactless now at 27.8% of total card transaction volume & 6.6% value 

Card Payments (credit, debit, and contactless)

Card payment usage continued to grow steadily in H2 of 2017, driven mainly by a significant increase in debit card activity (including contactless). Debit card payment volumes alone rose by 23.1%

year-on-year in H2 2017, while credit card volumes grew by 6.6% year-on-year. While usage volume of card payments has increased, the values of those transactions have nominally decreased. Contactless transaction value (which remain capped at ¤30) remain largely unchanged. The increase in debit card usage can be attributed to contactless payments, which are still enjoying high growth in volume with no signs of fatiguing (one in four off all card transactions are contactless).

ATMS

Withdrawals are slipping, but cash is still king at POS Despite economic growth, ATM usage is stagnant. The value of ATM cash withdrawals fell on a year-on-year basis for the second successive quarter in Q4 2017, with some €9.8 billion in cash withdrawn in H2 2017. Despite the dropping value of cash withdrawals, the latest figures show that c

Cash from ATMs – ATM usage is stagnant despite economic growth

ash is still king in Ireland at Point of Sale (POS). Figures from the European Central Bank show that Ireland is 2nd only to Germany in cash usage at POS. BPFI estimates that – with cash accounting for three quarters of all POS transactions – it will be at least 2020 before cards overtake cash in Ireland.

Cheques, credit transfers, and direct debits

Cheque usage continued to fall in H2 2017, dropping by 9.7% in volume year-on-year and by 5.3% in value. This is despite the government’s decision to refund Irish Water charges in late 2017 by cheque. Credit transfers and direct debits saw modest growth year-on-year, with credit transfers (including online and mobile banking transfers) growing by 4.8% year-on-year and direct debit by 2.4%. Of all domestic credit transfers in the second half of 2017, only 1.4% of them were paper-based. This signifies the continued move to paperless transactions that was noted in the first monitor.

What this tells us

“Payment card usage is growing fast but cash remains the main payment instrument in Ireland and in most European countries. The share of POS payments made in cash is falling, however, as account-based payments continue to grow as consumers use their accounts in new ways,” according to the Monitor. With the trend continuing to shift to digital payments, now is the time for hardware business owners to look at accommodating their customer’s payment preferences both in-store and online. With e-commerce tools and enhanced POS systems available for digital and contactless payments, there are new and developing ways for businesses to keep up with the trends.

This Business Support article featured in the May/June 2018 edition of The Hardware Journal.