On the subject of outmoded means of exchange and what to do about them, Forum friend and e-money guru Leo Van Hove draws my attention to an outstanding bank submission to the Irish Department of Finance. National Irish Bank made a pre-budget submission, urging the government to fast track reform of the payments system in Ireland. Their proposal advocates the phasing out of cheques, and the greater use of electronic forms of payment including direct debits, debit cards and credit cards. According to Kevin Gallen, the Deputy Chief Executive of National Irish Bank,
Ireland currently operates a highly inefficient mode of payments, which is costing the economy an estimated €750m every year. This is an unnecessary burden on exporters and households, which is adversely impacting on our competitiveness as an economy. Further, our heavy reliance on cash and cheques has a non-economic cost, in terms of both the environment and security.
According to the European Central Bank, annual cash withdrawals per consumer at Irish ATMs are well above the European average and cheques account for a quarter of all payments. So the banks suggests that the government announce an “E-Day” on 1st November 2008, after which:
- The Government should stop issuing or accepting cheques.
- The Law Reform Commission should investigate the issues involved in making electronic money a form of legal tender by 2010 in order to give people the confidence that if they have to make a payment, they can do so by debit or credit card.
- The taxi regulator should make it compulsory for all taxis and hackneys to accept payment by debit or credit cards by the 1st of November 2008.
- The Government should levy tax on the inefficient forms of payment instead on the efficient forms.
Sensible policies for a better Ireland, and it’s not just technologists like me who think so. Ronnie O’Toole, Chief Economist of National Irish Bank, commented,
Reforming our payments system is an opportunity to upgrade our technology, and improve the cost-competitiveness of our economy. It is a win-win situation which needs strong leadership from the government to push through.
These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]