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Payments Landscape in Ireland: Opportunities and Risks to 2021

Payments Landscape in Ireland: Opportunities and Risks to 2021

Summary

Cash has been a preferred instrument for consumer payments, accounting for more than half of the total payment transaction volume in 2017. However, its use is expected to decrease as electronic payments grow. Government initiatives to encourage card payments, a surge in contactless payments, and consumer preference for emerging payments, such as digital and mobile wallets, are all expected to reduce cash’s share in favour of electronic payments over the forecast period (2017e-21).

Banks in Ireland are also increasingly turning towards low-cost channels such as mobile and internet banking to offer products and services. The emergence of digital-only banks is likely to accelerate the shift towards electronic payments in Ireland. The Germany-based mobile-only bank Number26 launched operations in Ireland in December 2015, allowing consumers to open a current account by signing up via video chat or online. Furthermore, growth in e-commerce transactions will drive growth in the payment cards market, as debit and credit cards remain the preferred choice for online payments among Irish consumers.

Debit cards remain the preferred payment card among Irish consumers, accounting for 84% of the payment card transaction value in 2017. Rising use of debit cards for low-value transactions, the government’s launch of the National Payments Plan to encourage use of electronic instruments such as debit cards over cheques, the removal of stamp duty on ATM transactions, and the lowering of debit interchange fees even below EU level are key factors supporting use of debit cards.

Irish e-commerce market registered strong growth with a review-period CAGR of 14%. Debit and credit cards were the preferred method of e-commerce payment in 2017, accounting for over 45% of the total e-commerce transaction value. However, emerging methods such as digital and mobile wallets are gaining prominence in e-commerce. Popular international solutions, including PayPal, Apple Pay, and Android Pay, have expanded into Ireland to benefit from this lucrative market.

The report Payments Landscape in Ireland: Opportunities and Risks to 2021, provide top-level market analysis, information and insights into the Irish cards and payments industry, including:

  • Current and forecast values for each market in the Irish cards and payments industry, including debit and credit cards.
  • Detailed insights into payment instruments including credit transfers, cheques, direct debit, cash, and payment cards. It also, includes an overview of the country's key alternative payment instruments.
  • E-commerce market analysis and payment methods.
  • Analysis of various market drivers and regulations governing the Irish cards and payments industry.
  • Detailed analysis of strategies adopted by banks and other institutions to market debit and credit cards.
Companies mentioned in this report: Allied Irish Bank, Bank of Ireland, Ulster Bank, Permanent TSB, Avantcard, Visa, and Mastercard

Scope
  • On January 1, 2016 the Irish government replaced stamp duty with a surcharge on ATM cash withdrawals, with the aim of discouraging use of debit cards at ATMs and driving POS transactions. Until 2016, consumers were charged a flat annual stamp duty of €2.50 ($2.60) on ATM cards, and €5 ($5.30) on combinations of debit and ATM cards, irrespective of frequency of use. This is now replaced with a new tax structure under which card holders are charged €0.12 ($0.13) per ATM cash withdrawal, with an annual cap of €2.50 ($2.60) on ATM cards, and €5 ($5.30) on combinations of debit and ATM cards. In contrast, debit card transactions at POS terminals are free of charge. This is expected to discourage card use at ATMs and encourage use of debit cards for in-store payments.
  • In December 2015, the EU-wide cap on interchange fees was implemented in Ireland. However, the Irish government implemented a debit card interchange fee cap of 0.1%, which is 50% lower than the standard EU cap of 0.2%. The interchange fee cap on credit cards, however, remains at the EU level of 0.3%. While the regulation is expected to substantially impact the profitability of card issuers and schemes, according to the Irish government the cap will help merchants save up to €36m ($37.9m) annually, encouraging them to accept card-based payments.
  • Irish consumer uptake of contactless technology is rising. The Irish government increased the contactless payment limit from €15 ($15.80) to €30 ($31.60) from October 31, 2015. In March 2017, Visa announced that more than 3 million contactless transactions on Visa debit cards were made every week in Ireland, increasing from 1.3 million contactless payments per week at the end of March 2016. This was due to the increase in contactless spending limit and growing adoption of contactless POS terminals by retailers. Almost all major banks, including Kredietbank ABB Insurance CERA (KBC Bank), Allied Irish Bank (AIB), permanent tsb, Bank of Ireland (BOI), and Ulster Bank now offer contactless cards.
Reasons to buy
  • Make strategic business decisions, using top-level historic and forecast market data, related to the Irish cards and payments industry and each market within it.
  • Understand the key market trends and growth opportunities in the Irish cards and payments industry.
  • Assess the competitive dynamics in the Irish cards and payments industry.
  • Gain insights into marketing strategies used for various card types in Ireland.
  • Gain insights into key regulations governing the Irish cards and payments industry.


Market Overview
Executive Summary
Card-based Payments
E-commerce Payments
Alternative Payments
Payments Infrastructure & Regulation
Appendix

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