4.3 Consumer Preferences
4.3 Consumer preference
According to the European Central Bank’s (ECB) Study on the Payment Attitudes of Consumers in the Euro area (SPACE) survey[1] conducted in 2022[2], at PoS, cash remains the dominant payment method for Irish people. Approximately half of all transactions are conducted through cash and, the value of these transactions also constitutes the greatest share of payment instrument used at PoS as shown by Figure 8. Figure 7 highlights that card transactions also make up a substantial proportion of Irish transactions with over one in three transactions being conducted by card when making an in-store purchase.
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Figure 7: Share of payment instruments at POS in Ireland by volume |
Figure 8: Share of payment instruments at POS in Ireland by value |
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| Source: ECB SPACE Survey |
Source: ECB SPACE Survey |
With regard to online transactions, card is the dominant means of payment at 60% volume of all transactions which constitutes 56% of the total value, the remaining transactions come from a combination of card, credit transfer, e-payment solutions etc. as indicated in Figure 10.
| Figure 9: Share of payment instruments used for online payments in Ireland by volume |
Figure 10: Share of payment instruments used for online payments in Ireland by value |
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Source: ECB SPACE Survey |
Source: ECB SPACE Survey |
Data from the Central Bank provides a breakdown of card expenditure by sector[3]. Figure 11 provides a snapshot of a specific point in time based on data for June 2023. This shows that the retail sector had the highest percentage of card expenditure at 45% of total expenditure, with groceries and perishables being the largest subsection within that. Services make up the second largest proportion with 38% of total card expenditure, followed by the social (14%) and miscellaneous (3%) categories.
Figure 11: Irish Residents Card Expenditure by Sector, June 2023
Source: Central Bank Monthly Card Expenditure by Sector
According to Central Bank data, when compared against cash withdrawals, digital payments are the preferred means of payment in Ireland. Moreover, digital payments have enjoyed a steady increase in their use, tripling in the surveyed period. While cash withdrawals are a fraction of the overall number of payments compared to credit transfers, direct debits and card payments, it is important to note however, that a single cash withdrawal can represent multiple payments. The ECB SPACE survey data shows that in specific circumstances such as PoS payments, cash remains the preferred form of payment. While drawing on separate sources limits a direct comparison, it does serve to build a more nuanced understanding of the Irish payments landscape, in that payment preference is depended on the situation of the payer, and the data analysed.
Questions
The previous NPP in 2013 sought to make electronic payments the preferred means of payment for most people and to accelerate the decline in cheque usage. In contrast, a key of objective of this Strategy is Access and Choice by promoting reasonable options for consumers and small businesses.
4.1 Do you think that there is a reasonable level of choice in the payment methods currently available to consumers in Ireland?
4.2 If not, are there any initiatives that could be undertaken in addition to the legislation currently in train at an EU and domestic level, to better promote access and choice?
4.3 How can the NPS continue to support vulnerable groups access to the payments system?
[2] Note: The reader should be aware that this analysis is based on a survey conducted in a single year, and as such demonstrates a point in time, as opposed to a trend.
[3] Note: Online payments are defined by ECB SPACE as “any payments made online, excluding regular bill payments such as electricity bills or rent.” If a purchase is conducted at the PoS, this is counted as a PoS purchase.