pat mcloughlin, fsclub (download)

Irish Payment Services Organisation Ltd.

How Europe's Infrastructural Changes Impact the Irish Economy and Banks

Royal Dublin Society, BallsbridgeFebruary 25th 2009

Pat McLoughlinChief ExecutiveChief Executive

1www.ipso.ie

Topics to be CoveredTopics to be Covered

Examine Our Payments Structure

Compare With Europe

Examine Our Payments Structure

Outline Difficulties for SEPA

Compare With Europe

Outline Difficulties for Ireland

Outline Difficulties for SEPA

National Payments Plan

Outline Difficulties for Ireland

www.ipso.ie 2

National Payments Plan

SEPASEPA

4300+ Banks Signed Up for SCT

SEPA DD Due November ‘09

4300+ Banks Signed Up for SCT

Cheques and Cash out of Scope

SEPA DD Due November 09

PSD Due November ‘09

Cheques and Cash out of Scope

Self – regulation at present / reachability

PSD Due November 09

www.ipso.ie 3

Self regulation at present / reachability

Payment Statistics ‐ IrelandPayment Statistics Ireland

www.ipso.ie 4

Cheques/Other Paper Instruments V lVolumes

Number of Paper‐Based Payments in Ireland

128.8 129.9 129.9124.2 124.6

140

s

p y

100

120

Volum

e in M

illions

54.9

43.149.5

45.3 47.460

80

Ann

ual V

40

2003 2004 2005 2006 2007

Cheques / Paper Debits Paper Credits

www.ipso.ie 5Source: IPSO

Cheques/Other Paper Instruments ‐ ValuesCheques/Other Paper Instruments Values

975 90

1,000

872.00

948.70

845.00

885.00

975.90

900

Value of Paper‐Based Payments in Ireland

756.00723.00

829.00800

alue

in €Billion

s

660.00

699.00

600

700

Ann

ual V

a

500

600

2003 2004 2005 2006 2007

Cheques / Paper Debits Paper Credits

www.ipso.ie 6

2003 2004 2005 2006 2007

Source: IPSO

Card Payments ‐ VolumesCard Payments Volumes

300

251.0250

Number of Card Payments in Ireland

137 0146.0

174.0 174.1

204.0

150

200

olum

e in M

illions

86.0

106.094.6

105.0114.0

60 068.0

79.5

99.0

137.0

100Ann

ual Vo

60.0

0

50

2003 2004 2005 2006 2007

Credit Cards Debit Cards Total

www.ipso.ie 7

2003 2004 2005 2006 2007

Source: IPSO

Card Payments ‐ ValuesCard Payments Values

25

19.3

22.6

20

Value of Card Payments in Ireland

10.7

12.613.4

11.2

13.8

15.915

€Billion

s

7.5

9.510.7

3 74.3

5.2

6.7

9.2

5

10

3.7

0

2003 2004 2005 2006 2007


Credit Cards Debit Cards Total

ATM Cash FiguresATM Cash Figures

€6,544

€28.4€30€6,600

€22.8

€24.1€24.9

€28.4

€25

€6 200

€6,400

€22.0

€19.3

€22.6

€20€6,000

€6,200

€5,580€5,616

€5,807€5,858

€13 8

€15.9 €15

€5,600

€5,800

€11.2

€13.8

€10€5,400

2003 2004 2005 2006 2007


Cash Per Capita Cash (€ billions) Cards (€ billions)

Payment Statistics ‐ EUPayment Statistics EU

www.ipso.ie 10

EU ATM Cash per CapitaEU ATM Cash per Capita

,544

€7 000

7 4,47

1

€6

€5,000

€6,000

€7,000

ATM Cash Per Capita2007

5 31 151

,215

,221

2,29

9

2,38

9

€2,579

€2,599

€2,652

€2,806

€2,930

€3,112

€3,212

€3,372 €3,737

€3,937 €4

€3,000

€4,000

€526

€586 €729

€1,368

€1,407

€1,413

€1,538

€1,538

€1,544

€1,676

€1,835

€1,93

€2,1

€2,

€2,

€2 €

€1,000

€2,000

€0

Den

mark

Bulgaria

Romania

Cyprus

Slovakia

Poland

Luxembo

urg

Italy

Hun

gary

France

ech Re

public

Lithuania

Austria

Latvia

Sloven

ia

Malta

Spain

EU to

tal

Portugal

ro area total

Estonia

Swed

en

Finland

Belgium

Nethe

rlands

Germany

Greece

ed Kingdom

Ireland

www.ipso.ie 11Source: ECB Payment Statistics November 2008

L

Cze

Eur N

Unite

ATM Cash FiguresATM Cash Figures

Ireland v EU ‐ Annual ATM Cash per Capita

€5,843 €5,858

€6,544

£5,900

£6,400

€5,580 €5,518

£4,400

£4,900

£5,400

£3,400

£3,900

€2,518 €2,443€2,634

€2,730€2,579

£2,400

£2,900

2003 2004 2005 2006 2007

www.ipso.ie 12Source: ECB Payment Statistics November 2008 and IPSO

Ireland EU

EU Cheque VolumesEU Cheque Volumes

Cheques per Capita ‐ 200757

50

60

2629

32 33

30

40

0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 2 3 37

1315

17

10

20

0 0 0 0 0 0 0 0 0 0 0 0 0 1 10

Bulgaria

Hun

gary

Nethe

rlands

Poland

Estonia

Latvia

Slovakia

Czech Re

public

Lithuania

Swed

en

Finland

Sloven

ia

Austria

Luxembo

urg

Romania

Germany

Belgium

Den

mark

Greece

Spain

Italy

EU to

tal

Euro area total

Portugal

nited Kingdo

m

Ireland

Malta

Cyprus

France

13www.ipso.ieSource: ECB Payment Statistics November 2008

C E Un

EU Cheque ValuesEU Cheque Values

Cheque Value Per Capita ‐ 2007

€213

,408

€200,000

€250,000

19

€100,000

€150,000

€0 €0 €0 €2 €7 €11

€13

€64

€131

€266

€703

€1,044

€1,063

€2,127

€4,849

€5,671

€5,948

€6,073

€18,70

4

€19,67

4

€21,13

5

€25,27

5

€34,20

3

€34,22

5

€37,41

5

€39,63

9

€41,85

2

€50,5 1

€0

€50,000

Bulgaria

Hun

gary

Nethe

rlan

ds

Poland

Estonia

Slovakia

Latvia

Sloven

ia

Czech Re

public

Lithua

nia

Swed

en

Roman

ia

Luxembo

urg

Austria

German

y

Finlan

d

Belgium

Den

mark

EU to

tal

Italy

Euro area total

Spain

Fran

ce

Portugal

Malta

United Kingdo

m

Greece

Cyprus

Irelan

d


EU Credit Transfer VolumesEU Credit Transfer Volumes

140 133

100

120

140

86 88

118124

133

Credit Transfers Per Capita (Volume) 2007

60

80

41 42 4451 51 53

5763

6771

85 86 88

20

40

37

11 12 1216 16 18

27 2835 36

41 42

0

Greece

Bulgaria

Malta

Romania

Portugal

Spain

Cyprus

Italy

Poland

Lithuania

Ireland

Slovakia

France

EU to

tal

Euro area total

Den

mark

United Kingdo

m

Latvia

Hun

gary

Germany

Estonia

Swed

en

Belgium

Nethe

rlands

Sloven

ia

Austria

Luxembo

urg

Finland


U

EU Credit Transfer ValuesEU Credit Transfer Values

3 000

2 000

2,500

3,000

2,51

2

Credit Transfer Per Capita (Value €'000) 2007

1,500

2,000

1,44

9

500

1,000

15 20 36 45 66 69 94 113

118

120

124

136

148

153 226

270

293

328

330

344

361

369

385 53

7

573 75

3

0

Bulgaria

Poland

Irelan

d

Malta

Greece

Roman

ia

Portugal

Den

mark

Swed

en

Italy

Estonia

Lithua

nia

Sloven

ia

Hun

gary

Spain

Latvia

Austria

Euro area total

Fran

ce

Slovakia

Nethe

rlan

ds

Cyprus

Belgium

EU to

tal

German

y

Finlan

d

Luxembo

urg

United Kingdo

m


U

EU Payment Cards per CapitaEU Payment Cards per Capita

C di d D bi C d C i 2005

2.382.5

Credit and Debit Cards per Capita 2005

4 5 8 9 1.61 1.65

1.65

1.67 1.71 1.77 1.84 1.91

2.0Payment Cards Per Capita

(2007)

4 0.70 0.

86

0.88

0.88 0.94 0.99 1.04 1.10 1.13

1.14

1.16 1.

29

1.30

1.31

1.32

1.3 4

1.35 1.38

1.39

1.0

1.5

0.54 0

0 0

0.5

0.0

Roman

iaPo

land

Hun

gary

Czech …

Slovakia

Bulgaria

Den

mark

Latvia

Irelan

dLithua

nia

Italy

Austria

Greece

Fran

ce

Estonia

Germany

Cyprus

Malta

EU to

tal

Euro area …

Sloven

iaBe

lgium

Swed

enSpain

Portugal

Finlan

duxem

bourg

Nethe

rlan

dsUnited …


Lu N

EU Cheque Reduction ‐ ProgressEU Cheque Reduction Progress

103104 104105

98

95

90

99 99

9494

95

100

88

84

89

81

8785

90

81

72

71

81

7475

80

Cheque Usage Trends71

6765

70

2002 2003 2004 2005 2006 2007

q gBase Year: 2002


France Ireland Portugal UK

Relative Importance of Non‐Cash P T B V l (2007)Payment Types By Volume (2007)

Ireland EUIreland EURelative Importance by Volume (Ireland) 2007 Relative Importance by Volume (EU ) 2007

19.42%23.94%8.58%

25 38%

27.99%

41.04%

15.60% 36.93%

25.38%


Cheques Cards Direct Debits Credit Transfers Cheques Cards Direct Debits Credit Transfers

Relative Importance of Non‐Cash P T b V l (2007)Payment Types by Value (2007)

Ireland EUIreland EURelative Importance by Value (Ireland) 2007 Relative Importance by Value (EU ) 2007

1.99%

6.34% 13.33% 90.67%

78.34%3.16%

0 56%5.03%

0.56%


Cheques Cards Direct Debits Credit Transfers Cheques Cards Direct Debits Credit Transfers

IPSO AdvocacyIPSO Advocacy

IPSO Policy Paper

IPSO Roadmap Document

IPSO Policy Paper

Fiscal Measures

IPSO Roadmap Document

Strategy on Cheque Elimination

Fiscal Measures

Strategy on Cash Being Developed

Strategy on Cheque Elimination

www.ipso.ie 21

Strategy on Cash Being Developed

Lessons Learnt from Other CountriesLessons Learnt from Other Countries

• Successful strategies are most effective if• Successful strategies are most effective if there is a strong national consensus

• Shared ownership among all stakeholders needed of the vision and the payment strategy

• There should be no cross subsidies• There should be no cross subsidies

www.ipso.ie 22


• Merchants and corporates need to fully• Merchants and corporates need to fully participate in the development of the t tstrategy

• If savings are passed on – volumes rise

• Cost benchmarkers enable stakeholders to understand the true costs of eachto understand the true costs of each payment method

www.ipso.ie 23


• Investment in campaigns to persuade• Investment in campaigns to persuade and incentivise customers work

• Expected that contactless and mobile payments will become compelling convenience propositions

• Increase in point of sale devices displaces• Increase in point of sale devices displaces cash by cards

www.ipso.ie 24

Next StepsNext Steps

• New governance structure needed to• New governance structure needed to provide strategic direction

• New National Plan needed covering vision, objectives, deliverables, milestones and measures

• Barriers need to be identified and• Barriers need to be identified and solutions developed to deal with them

www.ipso.ie 25

Next StepsNext Steps

• A lead agency to take responsibility for• A lead agency to take responsibility for the development of the plan

• A public information and education campaign needs to be developed

• If Ireland does nothing it will fall even further behindfurther behind

www.ipso.ie 26

National Payments PlanNational Payments Plan

Government are LeadingGovernment are Leading

IPSO / Banks Playing a Key Role

Fiscal Policy is Working

Competitiveness Benefits for the Economy

www.ipso.ie 27

p y

NPIP Roadmap ‐ BackgroundNPIP Roadmap Background

• Discussions with the Department of• Discussions with the Department of Finance

• Agreed as discussion document by banks

• Changes since its preparation:Changes since its preparation:–Credit Guarantee Scheme

C it li ti S h–Capitalisation Scheme

–Banks in Government Ownership

–Agency Amalgamationwww.ipso.ie 28

NPIP Roadmap – Key QuestionsNPIP Roadmap Key Questions

• What is the best way to include the• What is the best way to include the financially excluded?

• How should Government and its agencies make and secure payments?

• What implications does that have for the industry?industry?

• How to influence consumers; SMEs; large corporations?

www.ipso.ie 29

Difficulties for SEPADifficulties for SEPA

• Political Case – Not Business Case• Political Case – Not Business Case

• Investment Climate

• Mandate Migration

• Public Sector Lead?• Public Sector Lead?

• Fees Debate / Business Model

www.ipso.ie 30

Difficulties for IrelandDifficulties for Ireland

• Inefficient Payments Behaviours• Inefficient Payments Behaviours

• Benefits Multinational Corporates

• Will there be an End Date?

• WhoWill Drive?• Who Will Drive?

www.ipso.ie 31

NPIP Roadmap – IssuesNPIP Roadmap Issues

• Has the draft roadmap potential use as a• Has the draft roadmap potential use as a consultation document?

• How should consultation happen?

• Who should consult?Who should consult?

• Who should be consulted?

• How should it happen?

• When should it be completed?When should it be completed?

www.ipso.ie 32

[email protected]+353 1 663 6740

33www.ipso.ie