Welcome Decta Limited to the regulated fintech ecosytem in Ireland!  Its authorisation brings the pool of regulated fintech in Ireland to 68, comprised of:

• 27 authorised electronic money institutions
• 21 payments institutions,
• 4 standalone open banking firms
• 11 virtual asset services providers and
• 5 crowdfunding services providers. 

Decta Limited's authorisation is the 2nd emoney institution to be authorised so far this year. The most recent payments company authorised was Etsy Ireland Limited and previous to that it was emoney firm Navro Payments Europe Limited.

As we said back on 20 February 2024, we are pretty sure that these numbers will continue to grow in 2024.

In what must have felt as extended St Patrick Day's long weekend for the Irish Decta Team, the company was authorised by the Central Bank of Ireland on Tuesday 19 March 2024 as an emoney institution. 

Decta Limited has been authorised to provide emoney services and payment services #3 (Execution of credit transfers, including standing orders) and #5 (Issuing of payment instruments and/or acquiring of payment transactions). 

Some observations:

• ​Why did Decta seek an authorisation in Ireland when another Decta Limited became authorised in Cyprus for emoney services on 10 August 2023?
• The Irish company was incorporated back on 1 October 2021.  That seems a long time from its incorporation date to today for an entity to become authorised - nearly 30 months. While a firm may not start an application immediately after it is incorporated, most firms - where they are the subsidiaries of foreign firms - start the journey no later than three to six months following incorporation.  If one was conservative and went with the six month timeline, it may have taken Decta Limited 24 months to become authorised.    
• It appointed its first set of Irish resident NEDs on 1 June 2022, with one of them leaving just after Christmas Day 2023 following the appointment of another NED just before that Christmas period.
• In addition to the NEDs, the company's local CEO sits on its board together with two group executives including its Cypriot authorised company's CEO and its Deputy CEO. 
• The Irish comapny's shareholders are RRE Tradecenters Holding Limited based in Cyprus and SIA "Suharenko Family Investments" based in Latvia, holding 67% and 33% of the Irish company respectively.   
• SIA "Suharenko Family Investments" is a shareholder in the Latvia Bank, AS “Rietumu Banka”.  
• Irish billionaire Dermot Desmond owns a one-third stake in Rietumu Banka.  Its group profits fell 37pc to €11.4m in the first nine months of 2023.
• Decta's operations in the UK, Decta Limited (UK), are authorised by the Financial Conduct Authority for emoney and payment services. 
• Decta was cited by Transparency International UK in a report focused upon financial crime risk.  The very informative report titled 'Together in Electric Schemes, Analysing Money Laundering Risk in E-Payments' was issued in December 2021.  The Bank was hit by two regulatory sanctions.  The largest sanction was a fine of €80mn later reduced by a French appeals court to €20mn.  According to The Baltics Times on 24 April 2023 "The Supreme Court in Paris concluded that the money laundering would not have been possible without Rietumu Banka. The case materials showed evidence of at least EUR 200 million laundered through the bank."  

• According to CRO records for Decta Limited as at year end December 2022 the company incurred a loss of €114.1K, had Net Current Assets of €46.9K and Net Liabilities of €110.6K.

​The Decta brand was called out by Transparency International UK in a report focused upon financial crime risk.  The very informative report titled 'Together in Electric Schemes, Analysing Money Laundering Risk in E-Payments' and issued in December 2021 carried a case study in which it noted that:

"[s]ome Latvian banks now own UK EMIs. Decta Limited, a UK EMI, lists its PSC as Rietumu Holding, the firm behind Rietumu Bank in Latvia.  In 2017, Rietumu was fined €80 million by French authorities after it was found to be involved in major tax and money laundering schemes. In response to an investigation by independent global media organisation, openDemocracy, Decta Limited stated it “acts in strict accordance with the requirements of FCA”, adding “we regularly pass anti-money-laundering (AML), Anti-Fraud, Know Your Customer and Combating the Financing of Terrorism audits held by Visa, Mastercard and big-four auditors, proving Decta to be complying with all latest AML standards.” 

In June 2021, Rietumu was fined again for money laundering failings in Latvia, this time in relation to its association with payment service providers, including those based outside of the country. A page on the website of Latvia’s central bank (Latvijas Banka), shows Rietumu has correspondent banking relationships with at least six UK EMIs.

It is becoming increasingly clear that British EMIs using Baltic banks for clearing services raises money laundering risk for both the UK and Baltic states. UK EMIs with unsuitable owners or weak AML controls are unlikely to carry out sufficient checks on their clients, while Baltic banks may believe firms regulated by the FCA have higher AML standards than they do in reality. This situation would lead to international payments being made from British EMI accounts using Baltic correspondent banks without sufficient checks being carried out on who was making them. This is similar to the scenario that occurred in the “Laundromats” exposed by the OCCRP, which resulted in billions of pounds in suspicious transactions being sent around the world." (see page 15 of this document).

Read more media here:

19/04/2022 - Last year also saw an appeals court in Paris reduce to €20 million a previous €80 million fine levied by a French court in 2017 against the bank for allegedly enabling clients of a company called France Offshore to evade taxes and launder money through companies in tax havens.

24/04/2023 - Verdict of French court on fine on Rietumu Banka for money laundering takes force

• decision on EUR 20 million fine for money laundering has come into force

17/06/2021 - Latvian bank Rietumu fined 5.85 mln for money laundering failures 

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• Need assistance with an emoney or payments authorisation or an account information service provider or virtual asset services provider registration application, check out Fintech Ireland and CompliReg's handy authorisation guides at https://fintechireland.com/fintech-authorisations.html.  

Minister McGrath and Minister of State Carroll MacNeill launch 2024 Ireland for Finance Action Plan
From Department of Finance 
Published on 8 March 2024
Last updated on 8 March 2024
 
The Minister for Finance Michael McGrath and Minister of State for Financial Services, Credit Unions, and Insurance Dr Jennifer Carroll MacNeill today (Friday 8 March) launch the second Action Plan from the updated Ireland for Finance strategy following Cabinet approval.

The updated Ireland for Finance strategy looks to further establish Ireland as the recognised global location of choice for specialist international financial services. The 2024 Action Plan details various key measures to realise this ambition over the course of this year, in collaboration with both public and private sector stakeholders. There is an estimated 57,600 people now directly employed in the international financial services sector, with the industry also indirectly supporting a range of professional areas. Following on from the update to the strategy in October 2022, the new Action Plan is focused on 13 key deliverables over the remainder of the year under the five themes, namely:

• Sustainable finance
• Fintech and Digital finance
• Diversity and Talent
• Regionalisation and Promotion
• Operating Environment

This plan contains a special edition on sustainable finance.

These 13 measures are in addition to the continued work that is carried out by organisations in the public and private sectors that allow Ireland to be the location of choice for international financial services firms.

While undoubtedly Covid-19 encouraged an increase in electronic payments in Ireland and most other countries it seems we may not quite be ready for a cashless society just yet as increasingly there are conversations around access to and acceptance of cash.

In December 2023 Minister for Finance, Michael McGrath TD launched a public consultation on a National Payment Strategy for Ireland. At the consultation launch at the Banking & Payments Federation Ireland BPFI, parts of his speech gave an insight into the government’s view on the place of cash within a future payments strategy: “All citizens should be able to participate fully in all aspects of modern life using digital or cash methods of payment. .. I want to ensure choice is at the centre of our future payments strategy.   We must recognise the important role that cash continues to play in our society and economy, and this is a role I am determined to protect.”

In the week following the consultation launch RTÉ reported that Minister McGrath called on the National Driving Licence Service to reinstate cash acceptance for driving licences at their centres around the country: "I expect all essential public services provided by the State and on behalf of the State to be accessible to members of the public whose preference is to transact in cash." His statement echoed previous government sentiment on cash acceptance which included the Minister writing to his government colleagues in September requesting that public bodies under their control maintain existing cash payment facilities pending the outcome of the National Payments Strategy.

During 2023 many organisations were criticised for their stance on cash acceptance. The National Ploughing Championship organise one of the largest spectator events in Ireland with over 200,000 attending in 2023. They introduced an online pre-purchase for the event to manage visitor numbers and this decision to not accept cash at the gates was described as an affront to the people of Ireland by one TD (Teachta Dála – a member of the Dáil, the lower house of the Irish Parliament). The Gaelic Athletic Association (GAA) have also been criticised for their policy not to accept cash at the turnstiles, though in fact most games do not allow purchase by card at the turnstile either and tickets can be bought by cash or card at participating supermarkets. While Swedish company Applus+ who operate the National Car Test (NCT) were forced into a u-turn on their plans to make their test centres cashless.

The European Central Bank conducted their second Study on payment attitudes of consumers in the euro area (SPACE) in 2022. Just under 2000 Irish consumers were surveyed on their payment attitudes. 54% reported cash as their main payment method by transaction count at Point of Sale (POS) with card being used by 37% and mobile apps at 6%. The use of cash in Ireland was lower than the euro area average of 59% and was a 14% drop on the 2019 figure. When it comes to value, card transactions were most popular in Ireland at 42% compared to 39% cash and considering most mobile payments are funded by a card the 6% of value by mobile app could be added to the card value. 

However, this survey does not seem to align with some other available data. The Department of Finance published their Consumer Banking Sentiment Survey in September 2023 and this found that cash was the preferred payment method of only 24% of respondents, albeit an increase since 2022, with debit card the preference of 50%, credit card 3% of respondents and mobile payment increasing in preference to 22%.

One of the main sources of cash in the economy will be withdrawals from ATMs using debit cards. Using the Central Bank of Ireland’s Monthly Card Payment Statistics the % of card transactions by value for ATM withdrawals dropped from 18% of value in October 2022 to 13.1% of value in November 2023. The value of ATM withdrawals at just under €1.1b for domestic withdrawals has remained relatively constant but the overall value of card transactions increased by just under 37% in the same period. The stats on ATM withdrawals also include cashback at POS.


The NCT which was one of the services criticised over a planned cashless policy revealed that only 3% of transactions were made in cash.

And while not scientific I conducted my only little survey of some retailers in the first week of January to assess what they are seeing on the ground.

• My ‘local’ – a Dublin suburban pub: Approximately 80:20 cards to cash although they have seen an increase in cash payments in the last year.
• An Irish fashion brand with a store just off Grafton St: Majority of transactions are digital/card, when I part paid in cash at around 2pm in the afternoon I was the first cash customer they had served that day.
• An Irish sporting goods chain: The vast majority of transactions are by card, they see the odd customer paying cash.
• A café specialising in fish and chips in my hometown in Donegal: The majority of transactions are by card, last summer it was nearly all card but in the last two months they have started to see more cash transactions.

Jonathan O’Connor from New Payment Innovation Limited estimates that on average 70% of transactions are processed by card and in many city centre businesses this can be as high as 95% with increased usage of cards in hospitality compared to retail.

The fact that cash usage is slightly creeping up in some situations mirrors the case in the UK with the British Retail Consortium publishing their BRC Payments Survey 2023 in December which disclosed that cash usage in transactions increased to 19% from 15% in 2021, the first increase in cash usage in a decade as the cost of living saw it used more as a budgeting tool. 

​In the debate on cash acceptance often consumer choice is frequently referred to. However, in any purchase of a good or service there is also a seller as well as the buyer and it’s important that private businesses have the choice to set their acceptance strategies as they do today.

On the streets of Dublin, as with most other towns and cities, businesses are making a choice on whether they wish to be a cashless business, or as in the case of some of these pictures, cash only businesses.
A Cork restaurant estimated the overall cost of cash handling to their business at 9% and after trading card only would not go back to accepting cash. They succinctly put it that they “are not the only show in town” so if a customer wanted to spend cash they could choose a different business.

While some businesses have gone cashless others have ditched the card machine or are encouraging their customers to pay by cash due to rising fees. Rising fees, particularly on business to business transactions such as in the building materials sector was raised by one company last year whose acquiring fees doubled.
It will be interesting to see how the National Payments Strategy balances the question of choice when it considers cash acceptance in the future.

​Cashless transactions are not a new function as this picture of a parking meter in Dublin City centre attests. The Card Payments Only sticker includes the Laser logo which was withdrawn 10 years ago so certain transactions have been card only for some time.

One of the areas where cash use has been prevalent  is in the area of tips and it’s great to see two Irish Fintechs present solutions for this. JUSTTIP and Strikepay are supporting businesses adhere to the recent legislation on tipping using separate terminals or QR code options. Supporting my local GAA club at a fundraising bag pack in a local supermarket before Christmas, for those who wished to donate but didn’t have cash to drop in the traditional bucket they, could donate by scanning a QR code.  

The one area where cash cannot be used directly of course is eCommerce. Proving that what is old, is new again, Kas$sh launched in the UK in October 2023 allowing customers to pay for online purchases using a barcode at Paypoint locations. Those involved in eCommerce for a number of years may remember similar schemes such as Ukash which was acquired by Skrill and merged with Paysafecard. While in Ireland the 3V disposable VISA cards were popular for a time and 3V was purchased by Safecharge who in turn were purchased by Nuvei. 

It doesn’t happen too often but if an acquirer, issuer or in this case from 2018, a scheme goes down having the fallback of cash  is a good security net.

With governments looking to maintain support for cash usage, indeed the government are pumping millions of cash into the economy each week through social welfare payments paid in cash through post offices, it is likely that cash will remain in use for some time. Even Sweden, one of the countries that was envisaged as being one of the first cashless countries, has enacted legislation that the six largest banks are obliged to provide certain cash services.

The Minister for Finance has also published the Access to Cash Bill 2024 that envisages ATM infrastructure being maintained at the level of December 2022. The BPFI have called for flexibility in the scheme that would allow for demand levels to be reviewed as cash usage declines.

One of the financial institutions who are planning to invest in their access to cash are Bank of Ireland who announced a refresh of their ATM estate as part of a €60m investment in branch and ATM refreshes. However this does follow a major system issue last August that saw Gardaí being deployed at some ATMs around the country when BOI customers were able to transfer money they did not have in their account to other banks and withdraw from ATMs.

So, watch this space for the outcome of the National Payments Strategy consultation and the future place for cash.
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*Mark Twain attributed it to former British Prime Minister Benjamin Disraeli but there is no proof Disraeli used this quote.

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