With the pandemic accelerating a change in both shopper and retailer behaviour, and with the growing ease and security of paying with cash versus credit cards, it seems that the future might be cash-free.
Whether from a convenience, security, or hygiene perspective, retailers are moving increasingly toward cashless payments. But what options are available for Irish retailers – and are they likely to be adopted?
"There has been a significant shift from cash to card, particularly since the pandemic," says Robert Doherty, director of product, AIB Merchant Services. "People want a convenient way of checking out. Merchants want secure methods of payment. And everyone expects all their payment types to be frictionless, quick and secure."
What are the alternatives?
In Ireland, mobile payment options and digital wallets include Apple Pay, Google Pay, PayPal and Revolut. Digital wallets are digital versions of credit and debit cards that are held on smart devices such as smartphones, smartwatches or tablets. Essentially they are still a card-based form of payment.
“It’s probably fair to say the only real option to cash are traditional credit and debit cards. We don’t have other options in Ireland,” says Doherty. “Apple Pay is still a credit card in a different mechanism.”
He continues: “There’s less and less cash in circulation and even vendors who would traditionally have taken cash such as taxi drivers and builders don’t want cash now, because it’s not suitable for them – from a security, hygiene or Covid-19 perspective. In six months, every taxi in Dublin will accept cards. ATM withdrawals have also dropped.”
In the UK, for example, bank-to-bank transfers are available. That’s not the case in Ireland, continues Doherty. “I can transfer AIB to AIB instantaneously but not from AIB to another bank. In Ireland, there is no faster payments network. There is only the card network.”
However, this may be set to change, with AIB, Bank of Ireland, KBC and Permanent TSB waiting on a ruling by the Competition and Consumer Protection Commission (CCPC) regarding setting up a banking payments app similar to Revolut. Synch Payments, the planned venture, will be an "instant money-transfer app" if the CCPC rules that it can move ahead.
The future of payments
"Digital wallets are gaining rapid momentum but that doesn't mean cash is cancelled," says Simon Tune, Commercial Director for Elavon Europe. According to a recent survey Elavon Europe and Ipsos Mori conducted, while 25 per cent of under 45-year-olds have started using or increased their use of digital wallets such as Apple Pay and PayPal, the same survey showed that 11 per cent of adults increased their use of cash during the pandemic.
“This shows the importance that notes and coins still play in our economy,” adds Tune. “But while it whispers to the volumes of consumers who still rely on cash, it also should speak loudly to financial institutions and regulators about the vital need to make access to bank accounts easier and more inclusive. How many, who cannot use digital payments, are in that position because they’re unable or unwilling to have a bank account?”
He believes the provision of reliable broadband and cellular networks is also key. "Businesses offering digital payments rely on connectivity, yet coverage varies wildly from Dublin to Dingle and Donegal to Duncannon. Cash remains the go-to alternative when traders can't connect."
The evolution of technology is changing the face of payments
What does the future look like for cash in Ireland? With the ability to pay on devices such as phones and smartwatches becoming not only possible but increasingly common, the evolution of payments will have more to do with the technology it’s being used on than the payment method itself.
Orla Bowers, senior product manager, AIB Merchant Services, says: “If you think of it, with Apple Pay and similar methods, it’s still using your card - it’s just being initiated by your phone and watch. It’s more of an evolution of device than an evolution of payment methods.”
The future may be digital but cash will always have a place.