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IPSO Chief Executive Pat McLoughlin's Presentation to the Financial Services Club, Ireland, 25th February 2009. This is part of blog entry that can be found at: http://thefinanser.co.uk/fsclub/2009/03/in-ireland-its-cash-or-cheques-only.htmlTRANSCRIPT
Irish Payment Services Organisation Ltd.
How Europe's Infrastructural Changes Impact the Irish Economy and Banks
Royal Dublin Society, BallsbridgeFebruary 25th 2009
Pat McLoughlinChief ExecutiveChief Executive
1www.ipso.ie
Topics to be CoveredTopics to be Covered
Examine Our Payments Structure
Compare With Europe
Examine Our Payments Structure
Outline Difficulties for SEPA
Compare With Europe
Outline Difficulties for Ireland
Outline Difficulties for SEPA
National Payments Plan
Outline Difficulties for Ireland
www.ipso.ie 2
National Payments Plan
SEPASEPA
4300+ Banks Signed Up for SCT
SEPA DD Due November ‘09
4300+ Banks Signed Up for SCT
Cheques and Cash out of Scope
SEPA DD Due November 09
PSD Due November ‘09
Cheques and Cash out of Scope
Self – regulation at present / reachability
PSD Due November 09
www.ipso.ie 3
Self regulation at present / reachability
Payment Statistics ‐ IrelandPayment Statistics Ireland
www.ipso.ie 4
Cheques/Other Paper Instruments V lVolumes
Number of Paper‐Based Payments in Ireland
128.8 129.9 129.9124.2 124.6
140
s
p y
100
120
Volum
e in M
illions
54.9
43.149.5
45.3 47.460
80
Ann
ual V
40
2003 2004 2005 2006 2007
Cheques / Paper Debits Paper Credits
www.ipso.ie 5Source: IPSO
Cheques/Other Paper Instruments ‐ ValuesCheques/Other Paper Instruments Values
975 90
1,000
872.00
948.70
845.00
885.00
975.90
900
Value of Paper‐Based Payments in Ireland
756.00723.00
829.00800
alue
in €Billion
s
660.00
699.00
600
700
Ann
ual V
a
500
600
2003 2004 2005 2006 2007
Cheques / Paper Debits Paper Credits
www.ipso.ie 6
2003 2004 2005 2006 2007
Source: IPSO
Card Payments ‐ VolumesCard Payments Volumes
300
251.0250
Number of Card Payments in Ireland
137 0146.0
174.0 174.1
204.0
150
200
olum
e in M
illions
86.0
106.094.6
105.0114.0
60 068.0
79.5
99.0
137.0
100Ann
ual Vo
60.0
0
50
2003 2004 2005 2006 2007
Credit Cards Debit Cards Total
www.ipso.ie 7
2003 2004 2005 2006 2007
Source: IPSO
Card Payments ‐ ValuesCard Payments Values
25
19.3
22.6
20
Value of Card Payments in Ireland
10.7
12.613.4
11.2
13.8
15.915
€Billion
s
7.5
9.510.7
3 74.3
5.2
6.7
9.2
5
10
3.7
0
2003 2004 2005 2006 2007
www.ipso.ie 8Source: IPSO
Credit Cards Debit Cards Total
ATM Cash FiguresATM Cash Figures
€6,544
€28.4€30€6,600
€22.8
€24.1€24.9
€28.4
€25
€6 200
€6,400
€22.0
€19.3
€22.6
€20€6,000
€6,200
€5,580€5,616
€5,807€5,858
€13 8
€15.9 €15
€5,600
€5,800
€11.2
€13.8
€10€5,400
2003 2004 2005 2006 2007
www.ipso.ie 9Source: IPSO
Cash Per Capita Cash (€ billions) Cards (€ billions)
Payment Statistics ‐ EUPayment Statistics EU
www.ipso.ie 10
EU ATM Cash per CapitaEU ATM Cash per Capita
,544
€7 000
7 4,47
1
€6
€5,000
€6,000
€7,000
ATM Cash Per Capita2007
5 31 151
,215
,221
2,29
9
2,38
9
€2,579
€2,599
€2,652
€2,806
€2,930
€3,112
€3,212
€3,372 €3,737
€3,937 €4
€3,000
€4,000
€526
€586 €729
€1,368
€1,407
€1,413
€1,538
€1,538
€1,544
€1,676
€1,835
€1,93
€2,1
€2,
€2,
€2 €
€1,000
€2,000
€0
Den
mark
Bulgaria
Romania
Cyprus
Slovakia
Poland
Luxembo
urg
Italy
Hun
gary
France
ech Re
public
Lithuania
Austria
Latvia
Sloven
ia
Malta
Spain
EU to
tal
Portugal
ro area total
Estonia
Swed
en
Finland
Belgium
Nethe
rlands
Germany
Greece
ed Kingdom
Ireland
www.ipso.ie 11Source: ECB Payment Statistics November 2008
L
Cze
Eur N
Unite
ATM Cash FiguresATM Cash Figures
Ireland v EU ‐ Annual ATM Cash per Capita
€5,843 €5,858
€6,544
£5,900
£6,400
€5,580 €5,518
£4,400
£4,900
£5,400
£3,400
£3,900
€2,518 €2,443€2,634
€2,730€2,579
£2,400
£2,900
2003 2004 2005 2006 2007
www.ipso.ie 12Source: ECB Payment Statistics November 2008 and IPSO
Ireland EU
EU Cheque VolumesEU Cheque Volumes
Cheques per Capita ‐ 200757
50
60
2629
32 33
30
40
0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 2 3 37
1315
17
10
20
0 0 0 0 0 0 0 0 0 0 0 0 0 1 10
Bulgaria
Hun
gary
Nethe
rlands
Poland
Estonia
Latvia
Slovakia
Czech Re
public
Lithuania
Swed
en
Finland
Sloven
ia
Austria
Luxembo
urg
Romania
Germany
Belgium
Den
mark
Greece
Spain
Italy
EU to
tal
Euro area total
Portugal
nited Kingdo
m
Ireland
Malta
Cyprus
France
13www.ipso.ieSource: ECB Payment Statistics November 2008
C E Un
EU Cheque ValuesEU Cheque Values
Cheque Value Per Capita ‐ 2007
€213
,408
€200,000
€250,000
19
€100,000
€150,000
€0 €0 €0 €2 €7 €11
€13
€64
€131
€266
€703
€1,044
€1,063
€2,127
€4,849
€5,671
€5,948
€6,073
€18,70
4
€19,67
4
€21,13
5
€25,27
5
€34,20
3
€34,22
5
€37,41
5
€39,63
9
€41,85
2
€50,5 1
€0
€50,000
Bulgaria
Hun
gary
Nethe
rlan
ds
Poland
Estonia
Slovakia
Latvia
Sloven
ia
Czech Re
public
Lithua
nia
Swed
en
Roman
ia
Luxembo
urg
Austria
German
y
Finlan
d
Belgium
Den
mark
EU to
tal
Italy
Euro area total
Spain
Fran
ce
Portugal
Malta
United Kingdo
m
Greece
Cyprus
Irelan
d
14www.ipso.ieSource: ECB Payment Statistics November 2008
EU Credit Transfer VolumesEU Credit Transfer Volumes
140 133
100
120
140
86 88
118124
133
Credit Transfers Per Capita (Volume) 2007
60
80
41 42 4451 51 53
5763
6771
85 86 88
20
40
37
11 12 1216 16 18
27 2835 36
41 42
0
Greece
Bulgaria
Malta
Romania
Portugal
Spain
Cyprus
Italy
Poland
Lithuania
Ireland
Slovakia
France
EU to
tal
Euro area total
Den
mark
United Kingdo
m
Latvia
Hun
gary
Germany
Estonia
Swed
en
Belgium
Nethe
rlands
Sloven
ia
Austria
Luxembo
urg
Finland
15www.ipso.ieSource: ECB Payment Statistics November 2008
U
EU Credit Transfer ValuesEU Credit Transfer Values
3 000
2 000
2,500
3,000
2,51
2
Credit Transfer Per Capita (Value €'000) 2007
1,500
2,000
1,44
9
500
1,000
15 20 36 45 66 69 94 113
118
120
124
136
148
153 226
270
293
328
330
344
361
369
385 53
7
573 75
3
0
Bulgaria
Poland
Irelan
d
Malta
Greece
Roman
ia
Portugal
Den
mark
Swed
en
Italy
Estonia
Lithua
nia
Sloven
ia
Hun
gary
Spain
Latvia
Austria
Euro area total
Fran
ce
Slovakia
Nethe
rlan
ds
Cyprus
Belgium
EU to
tal
German
y
Finlan
d
Luxembo
urg
United Kingdo
m
16www.ipso.ieSource: ECB Payment Statistics November 2008
U
EU Payment Cards per CapitaEU Payment Cards per Capita
C di d D bi C d C i 2005
2.382.5
Credit and Debit Cards per Capita 2005
4 5 8 9 1.61 1.65
1.65
1.67 1.71 1.77 1.84 1.91
2.0Payment Cards Per Capita
(2007)
4 0.70 0.
86
0.88
0.88 0.94 0.99 1.04 1.10 1.13
1.14
1.16 1.
29
1.30
1.31
1.32
1.3 4
1.35 1.38
1.39
1.0
1.5
0.54 0
0 0
0.5
0.0
Roman
iaPo
land
Hun
gary
Czech …
Slovakia
Bulgaria
Den
mark
Latvia
Irelan
dLithua
nia
Italy
Austria
Greece
Fran
ce
Estonia
Germany
Cyprus
Malta
EU to
tal
Euro area …
Sloven
iaBe
lgium
Swed
enSpain
Portugal
Finlan
duxem
bourg
Nethe
rlan
dsUnited …
www.ipso.ie 17Source: ECB Payment Statistics November 2008
Lu N
EU Cheque Reduction ‐ ProgressEU Cheque Reduction Progress
103104 104105
98
95
90
99 99
9494
95
100
88
84
89
81
8785
90
81
72
71
81
7475
80
Cheque Usage Trends71
6765
70
2002 2003 2004 2005 2006 2007
q gBase Year: 2002
18www.ipso.ieSource: ECB Payment Statistics November 2008
France Ireland Portugal UK
Relative Importance of Non‐Cash P T B V l (2007)Payment Types By Volume (2007)
Ireland EUIreland EURelative Importance by Volume (Ireland) 2007 Relative Importance by Volume (EU ) 2007
19.42%23.94%8.58%
25 38%
27.99%
41.04%
15.60% 36.93%
25.38%
www.ipso.ie 19Source: ECB Payment Statistics November 2008
Cheques Cards Direct Debits Credit Transfers Cheques Cards Direct Debits Credit Transfers
Relative Importance of Non‐Cash P T b V l (2007)Payment Types by Value (2007)
Ireland EUIreland EURelative Importance by Value (Ireland) 2007 Relative Importance by Value (EU ) 2007
1.99%
6.34% 13.33% 90.67%
78.34%3.16%
0 56%5.03%
0.56%
www.ipso.ie 20Source: ECB Payment Statistics November 2008
Cheques Cards Direct Debits Credit Transfers Cheques Cards Direct Debits Credit Transfers
IPSO AdvocacyIPSO Advocacy
IPSO Policy Paper
IPSO Roadmap Document
IPSO Policy Paper
Fiscal Measures
IPSO Roadmap Document
Strategy on Cheque Elimination
Fiscal Measures
Strategy on Cash Being Developed
Strategy on Cheque Elimination
www.ipso.ie 21
Strategy on Cash Being Developed
Lessons Learnt from Other CountriesLessons Learnt from Other Countries
• Successful strategies are most effective if• Successful strategies are most effective if there is a strong national consensus
• Shared ownership among all stakeholders needed of the vision and the payment strategy
• There should be no cross subsidies• There should be no cross subsidies
www.ipso.ie 22
Lessons Learnt from Other CountriesLessons Learnt from Other Countries
• Merchants and corporates need to fully• Merchants and corporates need to fully participate in the development of the t tstrategy
• If savings are passed on – volumes rise
• Cost benchmarkers enable stakeholders to understand the true costs of eachto understand the true costs of each payment method
www.ipso.ie 23
Lessons Learnt from Other CountriesLessons Learnt from Other Countries
• Investment in campaigns to persuade• Investment in campaigns to persuade and incentivise customers work
• Expected that contactless and mobile payments will become compelling convenience propositions
• Increase in point of sale devices displaces• Increase in point of sale devices displaces cash by cards
www.ipso.ie 24
Next StepsNext Steps
• New governance structure needed to• New governance structure needed to provide strategic direction
• New National Plan needed covering vision, objectives, deliverables, milestones and measures
• Barriers need to be identified and• Barriers need to be identified and solutions developed to deal with them
www.ipso.ie 25
Next StepsNext Steps
• A lead agency to take responsibility for• A lead agency to take responsibility for the development of the plan
• A public information and education campaign needs to be developed
• If Ireland does nothing it will fall even further behindfurther behind
www.ipso.ie 26
National Payments PlanNational Payments Plan
Government are LeadingGovernment are Leading
IPSO / Banks Playing a Key Role
Fiscal Policy is Working
Competitiveness Benefits for the Economy
www.ipso.ie 27
p y
NPIP Roadmap ‐ BackgroundNPIP Roadmap Background
• Discussions with the Department of• Discussions with the Department of Finance
• Agreed as discussion document by banks
• Changes since its preparation:Changes since its preparation:–Credit Guarantee Scheme
C it li ti S h–Capitalisation Scheme
–Banks in Government Ownership
–Agency Amalgamationwww.ipso.ie 28
NPIP Roadmap – Key QuestionsNPIP Roadmap Key Questions
• What is the best way to include the• What is the best way to include the financially excluded?
• How should Government and its agencies make and secure payments?
• What implications does that have for the industry?industry?
• How to influence consumers; SMEs; large corporations?
www.ipso.ie 29
Difficulties for SEPADifficulties for SEPA
• Political Case – Not Business Case• Political Case – Not Business Case
• Investment Climate
• Mandate Migration
• Public Sector Lead?• Public Sector Lead?
• Fees Debate / Business Model
www.ipso.ie 30
Difficulties for IrelandDifficulties for Ireland
• Inefficient Payments Behaviours• Inefficient Payments Behaviours
• Benefits Multinational Corporates
• Will there be an End Date?
• WhoWill Drive?• Who Will Drive?
www.ipso.ie 31
NPIP Roadmap – IssuesNPIP Roadmap Issues
• Has the draft roadmap potential use as a• Has the draft roadmap potential use as a consultation document?
• How should consultation happen?
• Who should consult?Who should consult?
• Who should be consulted?
• How should it happen?
• When should it be completed?When should it be completed?
www.ipso.ie 32
[email protected]+353 1 663 6740
33www.ipso.ie