e-Day – 19th September 2014
e-Day, set for 19th September 2014, marks the date from which Government Departments, Local Authorities and State Agencies will no longer issue or accept cheque payments.
The particular focus of e-Day is to encourage SMEs to migrate from cheque usage. Cheques are an expensive means of payment for businesses because of bank charges, stamp duty, postage, time spent making lodgements, and unpaid cheques. Businesses are migrating away from cheque usage and opting for more efficient payment methods instead. e-Day will move this process along while reducing costs for businesses.
Coinciding with e-Day Revenue is actively promoting the use of alternatives to cheque payments as outlined above. Those business customers currently paying or receiving refunds by cheque are advised to prepare for e-Day. ROS customers can nominate bank accounts for payments and refunds by selecting the "Manage Bank Accounts" option on their My Services tab. Alternatively business customers can contact ROS Payment Support Unit at 1890 226 336 to discuss payment solutions with the Revenue Commissioners. Further information on the implications of e-payments for Revenue transactions are available from the Revenue website.
e-Day forms part of the National Payments Plan (NPP) which was launched in April 2013 and outlines the specific initiatives that will be undertaken in the Irish economy over the next two years that aim to increase the use of ePayments in the Irish economy.
The National Payments Plan, aims at making savings of €1bn annually to the Irish economy by increasing the use of electronic forms of payment such as debit cards and electronic banking.
Ireland continues to rely heavily on cash and other paper payment instruments, and lags significantly behind our European peers in the use of more efficient electronic payment instruments. This has significant implications for cost competitiveness, security and consumer choice in Ireland. The efficiency of Ireland’s payment systems infrastructure could be improved if greater use were made of secure and efficient electronic payments, leading to a reduction in the proportion of transactions involving cash and cheques.
The National Payments Plan Steering Committee oversaw the development of the plan, and consisted of representatives of consumers, business, Government, banks and the Central Bank. The plan has also been approved by Government. The plan has three principal targets:
- Double the number of e-Payments such as debit cards or electronic credit transfers by 2015, leading to a reduction in cash and cheque usage to the EU average;
- Greatly improve the efficiency of the Irish cash cycle; and
- Ensure the successful transition of retail electronic payments to SEPA standards by 1st February 2014.
National Payments Plan
Electronic Payment Alternatives to Cheque Acceptance
e-Day, September 19th 2014, is the date from which public sector bodies in Ireland will no longer use cheques in their dealings with businesses. For outward payments, e.g. to suppliers, this can be almost universally catered for by the use of EFT (Electronic Funds Transfer), i.e. the supplier provides bank details and the payment is made electronically to that account. For public sector bodies accepting or in receipt of payments, this can be more complicated as in many circumstances ad hoc inwards payments to bank accounts can cause significant reconciliation difficulties for recipients.
Inward payments are covered by the National Payments Plan, outward payments, which can be made almost universally by EFT (instead of cheques), are not. The focus here is on business cheque usage, as this is the focus of e-Day, though recognising that many public sector bodies deal with both consumers and businesses. Pricing by banks and other payment services providers is also out of scope.
There are effectively only three core forms of electronic payment that represent potential alternatives to accepting cheques, namely EFT, direct debit (Single Debit Authority and Direct Debits) and payment cards (credit and debit) and these are covered here. Other forms of electronic payments (which tend to rely on one or more of the aforementioned) such as PayPal, pay by Amazon, Facebook Credits, Realex Fire etc. are not covered. Pre-paid cards are also excluded here as their use is not widespread in Ireland and for the purpose of this Guide can be treated as debit cards (from a payment acceptance perspective).
Most of not all of the banks and other payment services providers have comprehensive information available on their websites. Public Sector bodies may also be in the position to agreed specific terms and conditions with their bank or payment services provider.
EFT Electronic Funds Transfer - any electronic transfer of value, typically to a bank account
MSC Merchant Service Charge - the charge paid by the merchant to the acquirer for processing payment card transactions
Originator The beneficiary (payee) of a direct debit payment
SCT Sepa Credit Transfer - an EFT payment in euro within the SEPA area
SDD Sepa Direct Debit - a direct debit in euro within the SEPA area
SDMT Same Day Money Transfer – an individual EFT payment where the value is transferred on the same working day, generally used for high value and urgent payments and typically more expensive than regular EFT payments
SEPA Single Euro Payments Area – the EU’s payments integration initiative. SEPA currently consists of the 28 EU member states, the four members of the EFTA (Iceland, Liechtenstein, Norway and Switzerland), Monaco and San Marino.
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