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Pandemic spells end for paper cheques

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Contactless is now king for payments

Contactless is now king for payments

Contactless is now king for payments

Irish consumers finally spurned paper cheques in 2020 as Covid accelerated widespread acceptance of digital payments, according to new data from the Banking and Payments Federation of Ireland (BPFI).

Figures from the third quarter show digital banking volumes hit a new high, with 31.7m online and mobile banking payments being made. The total number for the year to the end of September was 89.1m - up 30pc on 2018, the last year such data was available.

Meanwhile, cheque volumes continued to decline precipitously.

The second and third quarters of 2020 had the lowest quarterly volumes on record. Only 17.6m payments were made by cheque in the first three quarters of the year. That drop of 35pc since 2018 means cheque usage is declining faster than digital payments are growing.

The numbers reflect a longstanding general trend that has sped up this year as consumers have embraced e-commerce and contactless payments amid Covid-19 restrictions.

While cheque usage exceeded digital payments as recently as 2014, when 70.4m cheques were written versus 46m digital payments, the reversal since then has been sharp.

"This continued drop in cheque usage by consumers and the significant uplift in the use of digital channels and electronic payments are trends we expect to see continue and which are being further accelerated by the impact of Covid-19," said Brian Hayes, chief executive of the BPFI.

"And while many consumers had already embraced new and innovative electronic payment methods, the current pandemic has resulted in a societal shift towards electronic payment options."

He said changes in consumer behaviour were likely to remain and drive a long-lasting reduction in the volumes of paper-based options such as cash and cheques.

Research by BPFI earlier in the year found that nearly half of Irish adults were using online or mobile banking weekly, while only 2pc preferred paying bills by cheque.

According to the European Central Bank and the Bank for International Settlements, Ireland is one of the few countries where cheques are still regularly used, along with Canada, Cyprus, France, Portugal, Singapore, the UK and the US.

Irish annual cheque usage per capita was down from 22.1 in 2009 to 6.4 in 2019.

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