4.9 Data collection and analysis

4.9 Data collection and analysis

In recent years, the increasing pace and scale of technological change has exposed a growing gap in the level of data and statistics available on the Irish payments market combined with a lack of information on the needs of consumers, payment services, and providers of goods and services. Consequently, the ToR tasks the NPS with considering the forthcoming new data[1] to be published by the Central Bank, and assess the extent to which that information addresses the existing data gaps as well as considering further research and analysis on payments. In identifying new data gaps, it is important to ensure that any conclusion pertaining to new data collection, should consider comparability with data already collected or mandated at European level, as well as proportionality in relation to the costs administrative burden and usability related to expanding data collection requirements. 

There are a number of related developments at EU level in relation to data issues. Following recent innovations and developments in the provision of payments services, the ECB have expanded the payment statistics data collection under the Payment Statistics Regulation. The amending Regulation, published on 11 December 2020, introduces new and more granular reporting requirements in relation to information on innovative payment services and channels, payment schemes, and fraudulent payment transactions. The latest data to end-2022 has recently been published by the ECB[2].

In common with all other euro area central banks, Ireland’s Central Bank collects statistics on payments, in order to have a perspective on developments in retail payments both within Ireland and more generally in Europe, and to inform retail payments policy.

Payment instrument usage in Ireland is provided by the Central Bank in its monthly card data releases, while value and volume data on other instruments (e.g. cheques and direct debits) are published on an annual basis. The first reporting of the new payment statistics data occurred in 2023. The Central Bank will publish related domestic data before end-January 2024.

In parallel with enhanced reporting requirements at ECB level, the Central Bank has undertaken a comprehensive review of the domestic monthly credit and debit card statistics data. The result of this review is to introduce an enhanced monthly data collection on card spending/cash withdrawals by Irish households. This was done in response to evolving trends in card payments and stakeholder demand for more granular insights. New insights include a regional breakdown of card spending as well as contactless and mobile wallet card payments. The new monthly card payment statistics was first published in September 2023. Publication of data in relation to fraudulent payment transactions does not currently take place but this aspect will be further considered by the Central Bank in 2024 pending a satisfactory review and analysis of related data.

While welcoming the recent developments to date, there are a number of gaps in the level of data available on the Irish payments market. These include indicators on open banking, crypto-asset payments, instant payments and sustainability. Additionally, It should be noted that in a consumer preference survey undertaken by the Department of Finance in 2023 18% of the 18+ population of Ireland did not have a bank account and so are missing from many statistics[3].

In relation to open banking in Ireland, there are no clear metrics that would enable measurement of progress of this sector. In addition, there is a lack of data available on the payments originating from third party service providers (e.g. the volume and value of payments initiated by payment initiation services). The recent 2021 IMF FSAP on FinTech[4] recommended that the Central Bank should, identify obstacles to the take-up of open banking in Ireland within a 3-5 period (i.e. by 2027). One such obstacle may be the lack of data available on the roll-out of open banking in Ireland given that understanding the size of the sector is important to appropriately understand the challenges faced for its future development.

In relation to crypto-asset payments, it is difficult to measure the degree to which crypto-assets are made for payment purposes in Ireland because there is no central data source. Moreover, it is not clear how to distinguish the use-case of a crypto-asset for payments versus a crypto-asset for investment purposes. This point is reflected in the 2022 IMF FSAP which sets out that “there continues to be a lack of comprehensive and reliable data on the sector, including on possible interconnections with regulated financial services providers.” The FSAP recommended that the Central Bank within a 1-3 year period (i.e. by 2025) “further intensify efforts to monitor developments on crypto-assets through systematic data collection within the scope of its powers and, where unacceptable risks remain, issue carefully targeted warnings and investor communications”.

Data on the take-up of instant payments within the Irish payments market is also unavailable. For the purpose of this consultation paper, “reachability” of Irish BICs within the instant payments architecture has been used as an indicator due to a lack of more precise, granular, data. Information on the number of instant payments made in Ireland compared to payments relying on standard credit transfer infrastructure would provide a more complete picture on instant payments in Ireland.

Finally, sustainability is an emerging theme within the payments sphere. However, there is no commonly understood way of measuring the impact of the retail payment system on the environment, and data is not collected centrally to understand in a comprehensive manner, the environmental impact of the Irish payment system. The Central Bank and the ECB are examining the environmental impact of the production of euro banknotes[5]. Furthermore, the Eurosystem’s Retail Payments Strategy[6] notes “In its investigation into how environmental sustainability can be promoted in the area of payments, the Eurosystem’s first step will be to develop a methodology to measure the level of environmental sustainability of payment transactions and infrastructures.” The development of this methodology is at an early stage. However, some EU Member States have already conducted studies on the environmental impact of payments, such as the De Nederlandsche Bank (DNB) has undertaken national level assessments of the environmental impact of both card payments[7] and of the cash cycle[8]. While both digital payments and physical cash payments have an environmental impact, the DNB found that the cash-cycle has a significantly greater impact despite digital payments being considerably more numerous. This was confirmed in a study conducted by the French Banking Federation indicates that cash is the payment method associated with the highest level of emissions[9]. Within digital payments, the DNB found 75% of the environmental footprint of such payments, to be attributed to PoS terminals.