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The rise of card and contactless payments in Ireland and what that means for cash

BOI Payment Acceptance’s Marketing Director, Barry Gray recently spoke on Radio Kerry’s Inside Business program about Ireland’s shift towards card, contactless and digital payments, the benefits of virtual wallets and what all this could mean for cash.

Listen to the interview below or read the full transcript.



Mary: Welcome back to the final part of In Business with Mary Gallagher.

Now, as we all know, the COVID-19 pandemic has had a major impact on the use of cash. And lots of people may have used their bank cards to chip and Pin or maybe to tap their cards before the pandemic.

And there were many that were starting to use virtual wallets via Apple Pay or Google Pay on their phone or indeed on Smartwatches, including Apple Watches, to pay for their goods and items. When they were out, they’re connected up to their bank accounts.

But does this move to bank cards and indeed to contactless payments via virtual wallets stem the end of cash altogether?

And does the move to contactless payments spell the end of bank cards?

Well, here to talk more about this is the marketing director with BOI Payment Acceptance, Barry Gray. Barry, you’re very welcome to the program.

Barry: Thank you very much, Mary. Delighted to be on.

The move away from traditional cash scenarios with card and new payment options

Mary: Since the pandemic, we’ve seen such a huge shift away from cash for the obvious reasons. It’s so much safer to be able to use card and contactless payments.

But I suppose just going back a few years, this move has been starting for a while. We’ve been gradually shifting away from cash, haven’t we, and more towards card and digital payments.

Barry: Absolutely. Going back even seven years ago, I used to always remember there was always key things – I’m a card advocate, so I always have been card first for a long time – but there were always things that I had to keep cash for and some of them that stood out for me. A taxi. I’d come back from maybe a work trip in London. I’d be at Dublin Airport and you would be literally waiting in the queue to say, no, I’ve only card and you’d be put to the side, waiting for a taxi that would accept card payments.

Or paying school bills for a trip for one of my kids. €5 here, €10 there. Whatever. It was always I needed cash for that or paying the tradesman or whatever.

And gradually, over time, all of those things – now, the pandemic has obviously accelerated our move towards cards – but we’ve seen new products and solutions come out for those scenarios to help people move and be able to offer card payments and alternative payments for rather than just cash.

The rise of contactless and the growing shift towards digital wallets

Mary: And just maybe looking at the actual card itself. I mean, we had been tapping for a few years, but the limit on how much we could tap for that has increased, thankfully, and it’s now up to 50 Euro.

Barry: Yeah, it’s €50. I think it was April 2020 that was introduced. So again, that was brought on initially by the pandemic. It used to be €15. Bringing that up to 50 has made a huge difference in terms of a typical basket size I guess going to your local convenience store or even maybe getting some petrol for the car. That has all helped with the increase to 50.

Interestingly, across the water in the UK, they have raised it over the last twelve months. They’ve gone further. They’ve moved it to £100 in the UK, likely that we may see a further increase there in Ireland.

But one of the other things I guess we’re seeing is the big growth in use of contactless with cards have now moved onto mobile phone and wearable devices. That’s the next big shift we’re seeing. And when you pay with your mobile phone, there is no limit on that. So that’s something we are going to see more and more of.

Mary: Yeah. I have to say, I’m somebody who only got into that in the past year. And I have to say it’s so convenient because it just means you just need your phone when you go somewhere.

You don’t have to remember to bring your purse when you’re going out. And as you say, there’s no limit on how much you can tap for as well. And you also see a lot of people going around with Apple watches, that kind of thing and paying on those as well.

Barry: Absolutely. So where I live there’s a lot of cyclists coming around a place called Howth and every Sunday morning and I see them all the time now stopping in local shop, coffee shops around and paying with their watch. It’s just so convenient. It’s secure, it’s quick. And we are going to see, I think, the next wave of growth – we’ve seen obviously a huge shift towards card payments in general and contactless payments – but I think the next shift we are going to see is are payments going online and you’re going to see the cards disappearing as the card is now going into the wallet on the phone or on the device

Mary: And the app Revolut as well, I mean, that has really changed things up with regards to maybe people being out for a meal and wanting to split the bill or parents wanting to pass on some money to their children. It’s such a convenient way to do so.

Barry: Absolutely. So Revolut has been transformative, I guess, in Ireland, and they just caught the wave at the right time. But in terms of person to person payments or peer to peer payments for you arranging an outing with friends which our friends are, as you said, a meal. And it’s just so easy to be able to pass the money that way through Revolut. I had a friend’s 50th birthday party last weekend and for a present, everyone just sent me the money by Revolut and I paid it and it’s just very handy to do that.

But also, again, as a parent of three small kids and that’s how I pay them. They either have Revolut cards or junior cards off my account and you just pay them by Revolut. And again, it’s more secure. They’re using the card to go out and pay and it also gives you access to see what they are buying. So it is very good. So even at a young age now, I think children, kids coming up, they will never know almost what cash is. They just won’t experience it. And they will be card first as they become young adults and adults.

Mary: And do you think even just speaking about children, do you think that would affect the likes of the traditional piggy bank where children would save? Do you think it’ll have an impact on saving?

Barry: Well, Funny you say that. I know my own son now he has a lot of cash. So still, he’s getting cash from grandparents and older relatives – communion money, stuff like that. People tend to still give cash in that regard. And at the moment he has cash literally under his bed and he will need to go and set up a savings account. Like I still think, of course, there is a room and a place for the traditional bank account and to start that savings culture, I think it is the right place to do it in a bank and put that money away. So there will be digital alternatives to that. But for the time being, I’d certainly prefer that he puts that money in a bank in the normal course.

Mary: And of course, our move away from cash over the years and moving to, you know, banking online, essentially, that has really changed the face of banks as well. Here in Ireland as we know, we’ve seen so many branches closed down as well across the country.

Barry: Well, banking no more than lots of services I guess all over the world banking is evolving as well. And, I guess, not speaking for Bank of Ireland, you’ve seen the footfall of people going into branches has declined immeasurably over the years.

And I can tell that just from my own experience, I have no need to ever really go into the branch for any of the services other than potentially if you’re going for something like a mortgage or something like that, a bigger transaction where you need a face to face interaction. But now with the use of mobile apps and banking apps and the functionality on those apps has evolved so much really, there’s just less and less need for someone to go into a branch unless it’s for maybe a consultative sale like a mortgage or something like that.

The possibility of a cashless society?

Mary: And I know you mentioned a few minutes ago we’re moving now to the contactless payments, to the phone, wallet or watches or that kind of thing. And you feel maybe cards are on the way out when it comes to the cash itself. And I know there has been such a big change and move away from using cash. Do you ever see cash going altogether and it’s just using cards and contactless payments?

Barry: Probably, I don’t. Not certainly for the near term. We have seen a huge shrinkage in cash usage over the last three years. If I look at November 2019 pre-pandemic versus November gone, 2021 cash has declined by 27% whereas cards on the other side has increased by 54%.

But we’ve seen Sweden is probably the main outlier in terms of going fully cashless to the extent that they have brought in legislation came into force I think in 2020 to preserve an adequate level of cash services in the market because there are always going to be other vulnerable people and other groups in society that will need access to cash or, again, in the event there was another unforeseen issue potentially whether that could be we’ve seen a hack in the HSC, could there be other forces or something that could cause an issue for electronic payments. So I think having cash as an alternative is always going to be a requirement so I don’t see cash fully disappearing certainly anytime soon.

Mary: Well look, Barry, we’ll have to leave it there. Thanks for your time on the show today.

Barry: Mary, Thank you very much.

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