Financial

Businesses urged to migrate from cheque and cash payments

With less than three months to go before e-Day, the National Payments Plan (NPP) is reminding councils, government departments and other public bodies that cheques moving between businesses will soon come to an end.

The NPP was launched in April of last year with the intention of making annual savings of e1bn to the Irish economy by increasing the use of electronic forms of payment such as debit cards and electronic banking. Ireland’s over dependence on cash has resulted in significant implications for cost competitiveness, security and consumer choice in this country.

The overall aim is to improve the efficiency of Ireland’s payment systems infrastructure by the wider use of secure and efficient electronic payments, leading to a reduction in the proportion of transactions involving cash and cheques. e-Day will take place on the 19th of September, from which central government, local authorities and State agencies cease using cheques when dealing
with businesses.

The primary focus of e-Day is to encourage SMEs to move away from cheque usage as they are either issuers or receivers of more than 60% of all cheques in Ireland. A shift from cheques to electronic as a preferred method of payment will result in reduced costs and improved cash flow for the overall business sector.

EDay is an important part of the NPP, an initiative spearheaded by the Central Bank to reduce costs and improve cash flow in the Irish economy. e-Day was launched in September last year, to give businesses and public sector bodies sufficient time to prepare for a smooth transition to electronic payments.

NPP Programme manager Ronnie O’Toole said: “Businesses and consumers will benefit when Ireland migrates away from cheque and cash payments, to safer and more efficient electronic payments.e-Day marks the point at which Government plays its part and stops using cheques in its dealings with businesses.”

O’Toole continued: “Cheques are an expensive means of payment for businesses because of bank charges, stamp duty, postage, time spent making lodgements, unpaid cheques, and the ‘cheque is in the post’ culture of late payments.” The NPP estimates that savings of up to €1 billion per annum could be made to the economy if Ireland were to match best practice in Europe by migrating away from cheques and cash in favour of electronic payments.

This will result in reduced costs and improved cash flow for both the business sector and consumers. Local councils are advised to prepare for e-Day by discussing payment solutions with their contracting businesses and their banks. Although e-Day will not affect consumer cheque usage, the NPP hopes it will provide a catalyst for broader migration towards e-payments.

Ronnie O' Toole NPP Programme Manager

NPP Programme manager Ronnie O’Toole

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