Minister McGrath publishes National Payments Strategy Terms of Reference

The Minister for Finance Michael McGrath has today (Tuesday) published the terms of reference for the National Payments Strategy (NPS).

In November 2022, the Retail Banking Review was published and contained two clear recommendations regarding payments: for the Department of Finance to develop Access to Cash legislation and prepare heads of a bill in 2023 and; for the department to lead on the development of a National Payments Strategy in 2024.

Commenting on the content of the NPS, Minister McGrath stated:

The last national policy in this area was set out in the National Payments Plan (NPP) in 2013 and, since this time, the banking and payments landscape has changed significantly in Ireland. The number of banks serving the sector reduced from 12 to 3 as banks were amalgamated or closed down and foreign owned entrants exited the Irish retail market. There has also been a considerable acceleration in technological developments and the pace of uptake has been accelerated by the COVID-19 pandemic. With that has come a decline in cash usage.

Therefore, now is a suitable time to develop a new strategy that will take account of this changing landscape and determine how best to adapt to it. The NPS will also take account of the EU legislative landscape, including existing proposals on instant payments and expected proposals on payment services, legal tender and the Digital Euro.

A key element of the work will be to examine and analyse fraud, which is a critical issue and something that was not considered at the time of the NPP. While much of this is governed by EU legislation, it is important that the NPS examines and analyses payment fraud to see if it can identify further domestic measures that could be taken to prevent fraud. In that regard, work on financial literacy is already underway within the department, something that was set out in a separate recommendation of the Retail Banking Review.

Finally, the NPS is looking at two inter-related issues; cash access and cash acceptance.

On access to cash, it will consider the likely evolution of cash usage and how the criteria for reasonable access to cash that will be set out in the Access to Cash legislation should evolve as cash usage changes in the future. The legislation will calibrate the criteria to ensure that cash access will remain at about December 2022 levels initially.

With that comes a need to ensure that cash can be accepted as a means of payment where possible. It will therefore look at the acceptance of cash issue and consider, inter alia, if legislation should be introduced to require certain sectors or sub-sectors to accept or facilitate the acceptance of cash; and if it should be policy to require the public service to accept or facilitate the acceptance of cash.

Link to ToR: National Payments Strategy 2024 Terms of Reference.