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Brian Cleary recently spoke with the Sunday Business Post about how payment technology has come on leaps and bounds in recent years, and Irish consumers have been among the most enthusiastic adopters. Read the full interview below.
However we decide to live and work as the world opens up following the coronavirus pandemic, there is a widespread recognition that information and communications technology has been not only the key to keeping society functioning, but is a greater driver of change than ever.
It is not all about Zoom calls and remote working, though. Essential technology platforms work in the background to underpin all kinds of daily activity, none more so than payments, which was already in the middle of major technological and regulatory change at the very moment the world seemed to shift on its axis.
“Covid has been like a nuclear reaction in terms of payment, but the question now is are we going to go back or forward,” Brian Cleary, managing director of payment processor BOI Payment Acceptance, said.
The evidence suggests the latter: Ireland was already a card-focused market, with Irish consumers rapidly adopting innovations from chip and pin to contactless.
Cleary said that electronic payment has been displacing cash for some years.
The real card kings
“Ireland is something of an outlier among European countries. In many ways, we are the real card kings,” he said
The figures back this up: European Central Bank (ECB) data shows Ireland as being among the top seven countries for per capita card use as far back as 2014, and usage has only gone up since then.
Today, consumers have options beyond chip and pin, of course, and contactless card payment and payment by smartphone and other devices clearly suits the changed mores of a post-Covid age. In fact, it is not hard to imagine Irish consumers following the lead of shoppers in countries such as Sweden, where cash has fallen so far out of favour that some shops do not accept it at all.
“I’d say we're going down the Nordic route. It's not just the hygiene of the notes and coins; people just like using a phone or a watch to pay for things. They like the customer experience,” he said.
The stakes are high for retailers: a consumer survey carried out by BOI Payment Acceptance before the pandemic indicated that 60 per cent would walk past a shop that had a sign saying it did not accept cards or placed restrictions on them.
“Retailers, online or in shops, just know that they have to accept cards. I was talking to a Trade Association partner recently and while some of their older members had been giving out about card payments previously, now it has simply become accepted,” Cleary said.
Secure transactions
The payments industry as a whole has done a lot to support retailers, and developments such as the PSD2 payment services directive have gone smoothly.
“Strong customer authentication under PSD2 is now in place, though there were some postponements in the likes of Britain. I think when people get used to it, it will be fine. It reduced the fraud risk substantially. There was a significant IT build out for everybody to change the data flows, the warehousing – it was work for everyone, and that was one of the reasons there had been delays,” Cleary said.
As a result, every transaction that runs through BOI Payment Acceptance’s platform is now more secure.
“Let's say you have a coffee shop, we ask what your average transaction is. If an irregular amount, say €1,500, is run through, it will be held for fraud checking and AML [anti-money laundering],” Cleary said.
Now that the work is done and customer confidence is in place, retailers are in a position to benefit not only from the preference for card and contactless payments, but the change in consumer behaviour that these technologies bring.
“One of the things we've seen is that the average transaction value on our book has gone up by about 50 per cent. More purchases and larger purchases have taken place,” he said.
Contactless transaction limits have already been raised and are likely to rise higher. Many will be unaware, though, that they are a non-issue when it comes to paying with a smart device.
“There's no limit on using contactless on mobile devices as there is greater security there and, according to a recent survey we conducted, a third of Irish consumers expect to use mobile payments more than before the pandemic,” Cleary said.
Confidence is high on the retailer’s side of the transaction too, as the increased security means payments are guaranteed.
“There's greatly reduced risk of fraud or chargeback“, he said