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.

If you are interested in writing a guest article for Fintech Ireland and have us promote the fintech article to our network, get in touch along with your idea for the bones of a first draft. ​

Welcome Etsy Payments Ireland Limited to the regulated fintech ecosytem in Ireland!  Its authorisation brings the pool of regulated fintech in Ireland to 67, comprised of:

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

We are pretty sure that these numbers will continue to grow in 2024.

Etsy Payments Ireland was authorised by the Central Bank of Ireland on Tuesday 20 February 2024 as a payments institution.  It is the first payments institutions to be authorised in Ireland in 2024 and the first such firm authorised since early September 2024 when Freemarketfx Ireland Limited became authorised.  Earlier this month an electronic money institution received authorisation.

Etsy Payments Ireland has been authorised to provide payment service #5, which is "Issuing of payment instruments and/or acquiring of payment transactions".  The company was incorporated back on 14 June 2019 and has been active since that date.  According to CRO records for Etsy Payments Ireland as at year end 31 December 2022 the company had a turnover of €609K, cash in the bank of €2.5mn and Net Assets of €2.64mn. Not often one sees such figures at a company which is going through authorisation.

​Gary French announced his appointment to the role of Chief Executive Officer at Etsy Payments Ireland in a Linkedin post yesterday. Gary is also on the board of the company.  Before joining the Etsy brand, Gary worked at Google  / Google Payment Ireland Limited and Elavon.

2024 is off to a slow start for those expecting a slew of authorisations and registrations by the Central Bank of Ireland of electronic money institutions, payments institutions and virtual asset services providers.

2023 saw just 5 electronic money firms become authorised in Ireland and just 1 payments institution became authorised.  Given that one of the emoney firms authorised was an upgrade from a payments institution authorisation, Ireland only welcomed 4 new companies to its emoney / payments sector. There was better news for the local crypto industry with 7 virtual asset service providers becoming registered in 2023 out of a pool of 11 such firms. These virtual asset firms and others that may get registered in 2024 can look forward to a deeper and more intense authorisation process should they choose Ireland to be their European home under the Markets in Crypto Asset Regulation. Fingers crossed.  And note MiCAReady.com is here to help those firms and other plan for their pan-European Union journey.

​Thus far in 2024 just one of these types of companies has received the Central Bank's imprimatur, that being Navro Payments Europe Limited, formerly known as Paytrix Ireland Limited.  According to publicly available Central Bank records, Navro Payments Europe was authorised as an electronic money institution on Friday 2 February 2024 (and only appearing on the Central Bank's register run of 6 February). In addition to emoney services, Navro Payments Europe was also authorised to provide payment service #3c (i.e.  Execution of credit transfers, including standing orders.)

Last August it was announced that fintech industry pioneer Joe Redmond had joined the Paytrix team as the new CEO for Ireland to drive its compliance and expansion plans across Europe. Other heavy hitters involved with Navro Payments Europe includes Peter Rowan, who joined the board of directors on 28 September 2022 and is listed on his linkedin profile as General Manager in addition to his director role. Other board directors of the newly authorised Irish company are Paytrix founders Edward Harrison and Aran Brown.  

Navro Payments is 100% owned by Paytrix Holding Limited.  The company was rebranded Navro Payments according to Companies Registration Office records pursuant to section 32 of the Companies Act 2014.

​Ireland is now home to 26 authorised electronic money institutions, 21 payments institutions, 4 standalone open banking firms, 11 virtual asset services providers and 5 crowdfunding services providers.  Rumour has it that a few more firms will hit these registers in the coming days.  We'll wait and see. 

Looking back over the Period H1 2020 to H1 2023 - to co-ordinate with the Central Bank of Ireland’s own Regulatory Service Standards Performance Reports - there are some interesting observations. During that period, as shown in the image below, the regulator:

• received 171 applications
• completed 235 key information checks
• authorised 10 electronic money firms (one being an upgrade from payment institution authorisation [InterPay Limited] and another which subsequently withdrew its authorisation in 2022).
• authorised /registered just 7 payments firms, including a large portion being standalone open banking firms (i.e. AISP and PISP)

The data in the first two bullet points comes the section within the reports headed Payment Firms (Payment Institutions, Electronic Money Institutions, Small Electronic Money Institutions & Money Transmission Businesses) & Bureaux de Change Authorisations.  Unfortunately the regulator's statistics for Bureaux de Change do not show the date a firm was authorised/registered.  Further, in the absence of more detailed data, it is possible (if not probable) that there is some double counting here.  

The data in the last two bullet points comes from the regulator's registers. 

Based on the numbers of firms authorised/registered versus applications received, one might have a few questions about the throughput of applications at the Central Bank.  However, there is no point speculating or over analysing the limited information available in the public domain.  What we need to do so is publication of substantial, independent and detailed information about the authorisation process and deeper and richer metrics. 

What is fair to say is that since since 2017, when Ireland had just two electronic money firms, that number has swelled 12 fold to the start of February 2024. Over the same period, the number of payments firms (authorised and registered) has jumped from 10 to 25 in total (21 authorised and 4 registered). More impressive is the rapid but seemingly controlled growth of quality digital asset firms totaling 11 from July 2022 to the end of last year.

Seems there is no slow down in Irish fintech in the dying days of 2023.

• Ireland is now home to 65 regulated fintech entities and is continuing to be described in glowing terms by applicants.
• There is a payments entity up for sale (if interested contact me - as I am in discussions with the owner - email officeATcompliregDOTcom).
• In the past 5 working days I have had discussions with 5 overseas groups looking to commence preparations for filing applications with the Central Bank of Ireland in the first part of 2024.

Linkedin blog at https://www.linkedin.com/posts/peteroakes_irishfintech-fintech-electronicmoney-activity-7143319059621638145-0HM_

Now I might be tempting fate here; meaning that Fintech Ireland and MiCA Ready may have to issue a further updated Regulated Fintech Map later this week given that several fintech have been notified that they are close to authorisation.


In any event, for today as of close of business Wednesday 20 December 2023, based on the Central Bank of Ireland's publicly available registers, the 65 regulated #fintech entities appearing on the Map are split - 25 x #ElectronicMoney; 21 x #Payments Institutions; 4 x Standalone Open Banking (AISP); 11 x #VirtualAssets and 4 x #Crowdfunding Services Providers.


This follows recent activity including Ripple's registration in Ireland as a Virtual Asset Services Provider and Linked Finance's authorisation as a Crowdfunding Services Provider yesterday (19 December 2023).


In summary:

• Ripple Markets Ireland Limited's can now provide the following services: (i) Provision of exchange services between virtual assets and fiat currencies; (ii) Exchange between one or more forms of virtual assets; (iii) Transfer (to conduct a transaction on behalf of another natural or legal person that moves a virtual asset from one virtual asset address or account to another) of virtual assets; and (iv) Custodian wallet providers. Congratulations Mark Doggett, Brian Spahn and Team.

 

• Linked P2P Limited (trading as Linked Finance) is now authorised for the facilitation of granting of loans. Congratulations ✅ Peter O'Mahony Niall Dorrian (ACMA) Niall O'Grady and Team.

​Yet again the Central Bank and Ireland are referenced by a newly regulated firm in a very positive manner, with Eric van Miltenburg, Ripple’s senior vice president for strategic initiatives saying “By providing regulatory clarity for the industry, Ireland — and the EU more broadly — are boosting confidence in the digital assets, payments and fintech ecosystem,”. Add that to the list of positive testimonials by the following recently authorised firms in their press releases: Payoma, Seedrs Europe Limited, NoFrixion and Freemarket.


Who is new to the Map? In addition to Ripple and Linked Finance, we have added PaymentSense Ireland / Dojo which achieved emoney authorisation in Ireland on 22 November 2023 to provide, in addition to emoney services, payment services 3b, 3c, 5. Congratulations Agata Strozynska. Máire Duffy Donal Collins, Jean ODonovan and Team.

​Fintech is firmly part of our daily lives. Whether it be paying utility bills, sending money to family and friends, purchasing insurance, arranging a mortgage, keeping an eye on our pension, borrowing money for major purchases or splitting the costs of electrical goods across interest-free instalments, fintech has become an indispensable tool.  

Modern finance in Ireland

Ireland’s economy is dominated by a handful of big local banks. They face stiff competition from a new bred of bank including bunq, N26, Raisin Bank and Revolut.  New competitors are often established by founders with technology backgrounds rather than traditional finance. With this comes new thinking in terms of product and tech (such as open banking), delivering customer services (including chatbots), fraud detection (for example phishing and smishing scams), optimising investment choice and predicting market trends based on data, our habits and aspirations while embedding machine learning and artificial intelligence into our financial decision process. 

International growth in Irish fintech

At the same time we should not overlook Ireland’s pioneers who have driven the global growth of fintech to an estimated value of $305 billion.  These innovative companies, including TransferMate, Fexco and Fire, are prime examples of dynamic Irish fintechs growing internationally. In the case of the first two fintechs, hailing from Kilkenny and Kerry, they are proof of what can be achieved from regional Ireland.   

Approach to fintech innovation risks

In Ireland, Fintech Ireland which tracks and promotes the Irish fintech ecosystem, reports that there are 280+ indigenous and 130+ international fintechs operating in and from Ireland.  From a low base 5 years ago, Ireland has seen an explosion in the number of fintechs regulated by the Central Bank of Ireland in the areas of payments, open banking, crypto and crowdfunding. In order to understand more about risks posed by fintech, including risks to consumers, the Central Bank has issued a consultation on its approach to innovation covering these and other types of fintechs, including the Web 3 economy including tokenisation, decentralised finance and blockchains.  

Supportive ecosystem for fintech
​
Whatever is next for the future of fintech will be dependent upon technological advances, consumer wants and regulation. Ireland is well-placed to continuing attracting innovative fintech to its shores owing to the ease of doing business here as well as access to our highly-educated workforce and continuing support from IDA Ireland, Enterprise Ireland, the Department of Finance and the Central Bank.  

Source:  https://www.businessnews.ie/fintech/what-next-for-the-future-of-fintech