Ireland’s move away from traditional payment scenarios to digital payment realities

BOIPA’s Director of Marketing, Barry Gray, spoke on the Inside Business podcast and radio show about the rise of digital payment usage across Ireland. He addresses the role of the pandemic in accelerating card payment adoption, the benefits of digital payment experiences, and  how Sweden may offer some insights into the future role of cash in Ireland’s payment landscape. Check out his key insights from the interview.  

The shift from traditional cash scenarios to card and new payment options

Since the pandemic, we’ve seen such a huge shift away from cash. But, for Gray, this move has been happening for a while as consumers gradually shifted away from cash and more towards card and digital payments.

“Going back even seven years ago, I remember there were always key things like trying to get a taxi if you had no cash on you. I’d come back from a work trip in London and you be literally waiting in the queue to say, “No, I’ve only card.”’  I’d be put to the side to, wait for a taxi that would accept card payments. Or paying school bills for a trip for one of my kids — €5 here, €10 there.  I needed cash for this or that, like paying the trades person.”

“And gradually, over time we’ve seen new products and solutions come out to help people move and be able to offer card payments and alternative payments rather than just cash”.

The rise of contactless payments

Looking at the role of the actual card itself, with the contactless limit on how much we could tap for increasing to €50 from April 2020, “Again, the increase in the amount we could tap for was brought on initially by the pandemic. It used to be as low as €15. Bringing that up to €50 has made a huge difference in terms of a typical basket size for even going to your local convenience store or even maybe getting some petrol for the car. That has all helped consumers pay securely.

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.”

The growing shift towards phones and digital wallets

Familiarity and consumer trust in contactless payments has grown consumer appetite for convenient and seamless payment transactions. Because of this, Gray moots, the possibility that we are seeing the card transition more out of sight as digital wallet usage rises along with payment apps. 

We’re seeing a big growth in digital wallet usage, with cards now moving onto mobile phones 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 of.

It offers consumer convenience because it means you just need your phone when you go somewhere. You don’t have to remember to bring your purse or wallet when you’re going out. We’re already seeing a lot of people going around with Apple watches, that kind of thing, and paying through those as well.

“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 

Payment apps have really changed things up too 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.

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.

Ireland not going cashless but enjoying additional payment options

With a growing preference for contactless payments and digital wallets, could cash go away altogether? Gray doesn’t think so. 

“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 have increased by 54%.”

“But we’ve seen Sweden is probably the main outlier in terms of going fully cashless to the extent that 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.  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 anytime soon. Really, it is about ensuring customers have the options to pay however they want.”