PayPal is scrapping fees on euro transfers between friends and family in the Republic, as the company aims to encourage consumers to ditch cash.
"Cash is expensive, it's not convenient," said PayPal vice-president for continental Europe, Middle East and Africa, Louise Phelan. "This is something consumers were asking us for. The reality is there hasn't been a way to transfer funds for free between friends and family."
The payments company, which says it has a million Irish users, estimates that Irish people are owed about €575 million in small unpaid debts, according to research carried out on its behalf.
The average Irish adult is owed – and owes – €152 because of small loans made to friends and family. Almost 20 per cent blame not having enough cash on their person, or a lack of access to cash machines, for failing to repay the loans in a timely manner.
About a quarter of those participating in the survey said they would not lend money again, while 8 per cent have fallen out with others over unpaid debts.
Despite the increasing number of ways to send payments electronically, PayPal’s research found 67 per cent of people said they still used cash to pay back friends and family for small amounts, and the amount of cash we are carrying has increased from €39 two years ago to €57 today.
ATM fees
About a third of consumers have been hit with fees at ATMs or for using internet and phone banking to make payments to loved ones.
PayPal has gradually introduced the waiving of fees on payments to friends and family across its European markets. Such payments are already fee-free in France, Spain and other countries, with more expected to be added by the end of the year.
PayPal is facing increasing competition globally as companies such as Square try to tap the payments market. However, peer-to-peer services are more limited in Ireland. Although Square has its European headquarters in Dublin, it does not yet offer its services to the Irish market. Meanwhile, Irish-founded Plynk, which offered users a way to transfer money through their Facebook accounts, is set to appoint a liquidator at the end of the month.
“Competition is always around,” said Ms Phelan. “We are constantly monitoring our competitors.”
