Ireland will struggle to meet EU e-procurement deadline


17 Dec 2007

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While Finance Minister Brian Cowen’s decision to reduce stamp duty on financial cards and increase duty on cheque-based payments has been welcomed, the Government will have to do a lot more if it wants to meet the European Commission’s 2010 targets for e-procurement, experts have warned.

An action plan with dates and achievable milestones will need to be set down if the nation of Ireland achieves an effective transition to electronic payments at Government and business levels.

In the Budget a fortnight ago, Minister Cowen TD announced a 25pc cut in the duty on credit cards, reducing the charge from €40 to €30. As well as this he implemented a 50pc reduction in the duty on combined cards, reducing the charges from €20 to €10, as well as a 50pc cut in the duty on ATM and debit cards from €10 to €5.

These changes are to be part-financed by an increase in the duty on cheques from 15 cent to 30 cent per cheque and were designed to energise the shift from paper to electronic payment methods.

However, technology experts have warned that more needs to be done.

Jim Bracken, chief executive officer of GS1 Ireland, warned: “There remains a lot more to do if we are to meet the 2010 European Commission targets for e-procurement.

“The Government must continue to take the necessary steps to bring about the movement away from paper to electronic trading, for reasons of efficiency, security and most especially carbon footprint and competitiveness,” Bracken said.

He added: “We again urge the Government to set out dates and strategies by which all state entities will be mandated to transact trade electronically and to adopt the open and well-established global standards for all e-procurement strategies.”

Jessica McIntire, product manager at Sage Ireland, warned that in Ireland today there is a massive overreliance on cash and cheques.

She cited European Central Bank figures that indicate 24pc of non-cash transactions in Ireland are still made by cheque, which accounts for a massive 79pc of euro changing hands in Ireland.

“An overreliance exists in the Irish market on cash and cheques, with cash being the most expensive of all payment mechanisms. While there is an abundance of electronic payment options available to Irish customers, Irish domestic payment behaviour patterns continue to be heavily reliant on the options that are the most inefficient – cash and cheques.

“Electronic payments have significant benefits over paper-based payments and cash. They are more secure, more efficient, less costly and more convenient with a cost savings of 76pc to be made by moving to online/card payments,” McIntire added.

She said 66pc of the Irish population now owns either a credit and/or Laser card. The debit card market population has grown by 18pc in the past 12 months.

McIntire went on to say that the volume of card payments made in Ireland increased by 19pc in the past two years. “The value of these transactions grew by 42pc in the same period.”

She cited the move by technology players like Sage to embed payment services in their software to enable time and cost savings for businesses.

“We’re making it easy for Irish SMEs to finally let go of hassle-laden processes like receiving payment by cheque,” McIntire concluded.

By John Kennedy

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