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Irish consumers are changing their payment habits. They are switching to debit cards and are making more low-cost, convenient electronic payments through online banking channels. Additionally, ATM cash withdrawals are dropping in both volume and value. A significant switch to electronic and card payments could benefit the Irish economy to the extent of €1billion per annum.

Electronic payments, which are fast, efficient and cost-effective, are vital in the current economic climate. In Ireland, the value of electronic payments in 2010 was 36% of all non-cash payments, in stark contrast to the EU average of 96%, as consumers on the continent have been using more cost-efficient and streamlined payment methods for many years.

Another notable trend is the increase in the number of people using Internet banking services over the past four years with over 2.8 million bank customers now registered for online banking. These customers made 10.7 million online payments in Q1 2011, a 17.3% increase on the same period last year.

Ireland remains one of the highest users of cash in the EU, at least as measured by ATM withdrawals on a per capita basis, making an average of 40 withdrawals, totalling almost €5,000 per capita, in 2010. However, the volume of cash being paid out of ATMs in Ireland dropped by over €3billion to €22.3 billion in 2010. The total number of debit cards issued is 3.4 million. Even allowing for the economic downturn, there does appear to be a shift away from cash to debit cards for day-to-day purchases. While the rise in online purchasing is having some impact, debit card usage continues to grow in popularity, with over 200 million transactions in 2010, now exceeding the number of ATM withdrawals.

The total spend on payment cards in Ireland last year was €22.8 billion – now exceeding the value of ATM withdrawals (€22.3 billion) for the first time. Figures for the first half of 2011 indicate the continued rise of card usage and decline of ATM withdrawals.

“The fact that there is a clear trend towards greater usage of debit cards is a sign that Ireland is embracing a new era in consumer transactions and it will come as a boost to retailers and businesses across the country as the speed and efficiency of payments improves. It is essential that Irish consumers continue to take the lead from their European counterparts in switching to more efficient payment methods as this will positively impact on Ireland’s economic competitiveness”.