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Business FAQs

Cheque

How long does it take to clear a cheque?

It normally takes three to five business days to clear a cheque if it is drawn and payable on a member bank of the Irish Paper Clearing Company Limited (IPCC) (insert internal link to ‘Irish Paper Clearing Company Limited (IPCC)’ page on BPFI site).

The cheque is lodged on Day One. It is exchanged with the bank on which it is drawn on Day Two. The customer on whose account the cheque is drawn is debited on Day Two or Three. In the event that the cheque is to be returned unpaid for any reason, it will be returned by close of business on Day Four to the payee’s bank.  It will therefore be Day Five before the payee’s bank knows that the cheque is being unpaid.

While the clearing cycle normally takes three days, certainty of payment can actually take up to five or six days. Depending on a particular bank’s policy in relation to risk control, customers are not always permitted to draw down the funds ahead of this timeframe, in order that the bank may be certain that the cheque will not be returned unpaid.

If your bank or building society is not a member of IPCC, you should contact it directly to confirm its clearing cycle.

Can I stop a cheque?

A stop can be placed on a cheque provided it has not already been paid. The bank should be contacted with details of the particular cheque, i.e. the date of issue, cheque number, the amount and the payee.

Do cheques go out of date?

It is the practice of banks in the Republic of Ireland to decline cheques which are presented for payment six months or later than the date the cheque is written.

Can a cheque only be lodged to the named recipient of the cheque?

A cheque which is crossed with “a/c payee only” must be lodged directly into the bank account of the named payee. However, if a cheque is crossed with ‘not negotiable’ or ‘& co’ it may be endorsed by the payee, which means it can be signed over to the benefit of a third party on the reverse of the cheque. It can then be lodged to the bank account of that third party.

Is there a cross-border cheque clearing service?

There is no centrally managed cross-border clearing system in operation for cheques and so it is strongly recommended to use electronic payments for accepting or making cross-border payments. Cheques drawn on foreign countries lodged in a bank in the Republic of Ireland may take a considerable time to clear (check with your bank) and may be returned unpaid in accordance with the legislation and/or clearing rules in place in the country in which the cheque is drawn. For some countries this can be at any time in the future. If the cheque is denominated in another currency, the beneficiary will be exposed to exchange rate fluctuations until the value for the cheque is received.

What is the difference between a cheque and a bank draft?

A bank draft is similar to a cheque, with the primary difference being that it is drawn on a bank rather than a customer account. Because of this, bank drafts have a certainty of fate in that they will not be returned unpaid unless they have been counterfeited, fraudulently altered or stolen. It is for this reason that it can be a preferred method of payment instead of a cheque. However, it should be noted that the value clearing cycle for a bank draft is usually the same as that for a cheque.

Can I design my own cheque?

Yes, your company can design its own company cheque. Access Recommended Guidelines for Printing and Using Company Cheques in the Republic of Ireland.

Debt Management

I have a problem with debt. What should I do?

The BPFI Protocol on Multi-banked SME debt which was launched in January 2014 allows for an SME in financial difficulty, and with multi-banked debt, to communicate with BPFI members on a collective basis and to allow banks to collectively discuss and consider the case.

View BPFI’s Protocol on Multi-banked SME Debt

The Central Bank of Ireland’s revised Code of Conduct for Business Lending to Small and Medium Enterprises became effective from 1 January 2012.  The revisions deal mainly with how banks deal with SMEs in financial difficulties only. The revised Code introduced a number of new provisions that aim to assist borrowers and lenders to address financial difficulties. The Central Bank’s Code of Conduct for Business Lending to SMEs is available on their website.

Further information on the Central Bank’s Code of Conduct for Business Lending to SMEs is available on the BPFI website

Dormant Accounts

How do I enquire about a dormant account?

Banking and Payments Federation Ireland (BPFI) provides a guide to dormant accounts. Download BPFI’s Guide to Dormant Accounts

You can get dormant account application forms from banks or from An Post. Please ensure that you send the completed application form to the institution that you believe holds the dormant account, not BPFI.

Fraud

How can I protect my business against fraud?

Financial losses due to card fraud are much lower in Ireland than in most other EU countries, trends continue to vary and criminals continue to target consumers and retailers in order to obtain payment card details for fraudulent use.  When a retail business is the target, this ultimately has a financial impact on the retailer and may also cause reputational damage to the business.

SafeCard.ie provides businesses with useful tips on how to protect your business against payment card fraud. Visit SafeCard.ie for more information

How do I know if a card is counterfeit or stolen?

For a Chip and PIN card transaction the cardholder verifies that they are the bona fide owner of the card by keying in a corresponding PIN to the terminal PIN pad. The terminal verifies the cardholder, based on the PIN being approved. If the card is a counterfeit one, the terminal will prompt the staff member to decline the card or if it is accepted online, the card issuer will be liable for the fraud spend. Visit SafeCard.ie for more information

What can I do if I suspect card fraud in my place of business?

Contact the Gardaí immediately to advise them of your concerns. Visit SafeCard.ie for more information

Lending

What financial supports are available to my business?

Banks and non-banks provide a range of credit options for businesses to finance new assets and other business investments.  The main types of business credit for investment are outlined below. Banks must follow a code set out by the Central Bank of Ireland in relation to lending called the Code of Conduct for Business Lending to Small and Medium Enterprises (SME Code).

The SME Code can be accessed on the Central Bank of Ireland website

Access more information on the Central Bank of Ireland’s revised Code of Conduct for Business Lending to SMEs on the BPFI website or visit www.smallbusinessfinance.ie

How do I apply for a loan?

Banks and non-banks provide a range of credit financing options for business.  How a business uses credit depends on a number of factors including its stage of development, trading history, financial status and how it plans to use the credit. New businesses should consider the full range of credit options and consult with a professional financial adviser to decide what solution best meets its needs.

Visit smallbusinessfinance.ie for more information on the types of credit available to businesses and the loan application process

How do lenders assess viability?

Each lender makes its own assessment of business viability but key characteristics of viable businesses include:

  • Trading history: A history of successful trading and profit and/or cash generation – typically demonstrated by the financial accounts of the business.
  • Future cash and profits: Realistic cash flow projections and business plans based on realistic assumptions for the business and the sector it in which it operates in, that demonstrate the potential for continued trading and cash/profit generation for the foreseeable future, and demonstrate the business is expected to generate enough cash to make repayments as they fall due.  This is particularly important for start-ups, which do not have trading histories. Short-term cash flow projections (i.e. 6-12 months) are of particular importance in the current environment.
  • Business model:  A management team that has adjusted its business model and cost structure to the prevailing business climate.  For start-ups, the business plan should reflect current trading conditions and show how the business will cope with and trade through them.
  • Credit history: A borrower should ideally have a good credit history over the previous three to five years and making payments to creditors and the Revenue Commissioners as required.  For start-ups, this may relate to the promoter’s personal credit/financial history or any previous business ventures in which they have been involved.
  • Solvency: An ability to show that the business is capable of maintaining or returning to solvency within a reasonable timeframe.
My bank won’t give me credit – what are my options?

If you have applied for credit and you have been declined or if your bank has changed or withdrawn you credit, you should ask the bank to explain why this has happened.  Under the Code of Conduct for Lending to Small and Medium Enterprises, a bank must clearly explain the reason for any application decline or credit withdrawal/change. If you are not happy with the reason given, you should appeal the decision to the bank either by using their internal appeals process or by making a complaint.

Access the SME Code on the Central Bank of Ireland website

The Credit Review Office will also look at cases of where credit is refused, withdrawal or reduced for customers of and applicants to participating banks. For more information, visit the Credit Review Office website here

Payment Cards

What is an acquirer?

The bank or card processor which processes a retailer’s payment card transactions is known as an acquirer or merchant acquirer. In order to process card payments a business is required to enter into a contractual agreement with a relevant acquirer which in turn charges a fee/commission for the service it provides to that business.

What acquirers are operating in Ireland?

View a list of acquirers (payment card processors) operating in Ireland

Can cards that are not Chip and PIN enabled be accepted?

Yes. Non Chip and PIN cards will continue to be issued in many countries for some time. Tourists and visitors to Ireland will continue to shop here using the old-style magnetic stripe and signature cards and terminals will remain capable of accepting both types of cards. Staff should dip or swipe payment cards and wait for the terminal to prompt them on the requirement for a PIN or signature. If a signature is required, staff will need to check the signature on the receipt against that on the card.

Visit safecard.ie for more information on accepting non-Chip and PIN cards

What are the benefits of offering contactless payments?

ContactlessContactless is a quick, easy and secure way to pay for items up to €30. The cardholder simply holds the payment card up to a secure reader in a shop. Less than a second later, they’ve paid for the goods.  It eliminates the need to insert the card in to the payment terminal, to key in a PIN or to sign a receipt when paying.  Many cards in Ireland now include Contactless technology and more and more shops are beginning to accept contactless cards.  Cards that have contactless technology will have the Contactless Symbol on them.

The benefits for retailers are:

  • Faster service: With payment completed in less than a second, you can serve your customers faster, cut queues and reduce lost sales.
  • Simple for staff: Contactless payments eliminates the need to check signatures, reduces the need to request PINs or to fiddle around with change, making payment simple for staff and quicker for customers.
  • Reduce cash dependence: Counting, securely transporting and banking notes and coins can be expensive. Contactless can help break your cash dependency.
  • Increased Sales: You will no longer miss out on sales when customers don’t have enough cash in their wallets

 

Where can I get advice on how to reduce the risk of card fraud?

For more information on card fraud prevention and to find a comprehensive list of frequently asked questions, training materials and lots of useful fraud prevention advice, please visit www.SafeCard.ie.

SEPA

What is the Single Euro Payments Area (SEPA)?

SEPA is the next step towards European integration, which aims to make all electronic cross-border payments in euro between the participating countries as easy, inexpensive and secure as national payments within one member state are today. Within SEPA a customer can make electronic payments to any beneficiary located anywhere in the euro area using a single bank account and a single set of payment instructions. SEPA enhances competition within national payment environments by opening up markets to providers and ensuring equal opportunities. It brings with it higher service levels, more efficient products and cheaper alternatives for making payments across national boundaries.

Can you explain the legal framework surrounding SEPA?

On 1st December 2005, the European Commission presented its proposal for a Directive of the European Parliament and of the Council on payment services in the internal market. This Directive ensures that the same legal framework applies to all payments made within Europe. The Payment Services Directive (PSD) establishes the necessary legal framework for SEPA payments, and also applies to existing national payment products.

On 25th April 2007, the European Parliament adopted the proposal for the Payment Services Directive (PSD) for which the ECOFIN Council had already agreed a general approach at its meeting in March 2007, and which has been adopted by the EU Council.

 

What payment facilities are covered under SEPA?

There are four payment elements involved in SEPA:

  • SEPA Credit Transfer Scheme
  • SEPA Direct Debit Scheme
  • SEPA Cards Framework
  • SEPA Cash.

The EPC has put in place a simplified set of rules, technical standards and business practices surrounding the four payment elements mentioned above, to be adopted by all participating countries.

Where did SEPA originate from?

SEPA is the largest payments initiative ever undertaken within Europe. It has been championed by the European Commission (EC) as well as the European Central Bank (ECB), working with the Eurosystem and with the support of the European Payments Council (EPC). A successful implementation requires commitment from all parties involved, including users of payment services and supportive public authorities.

Who benefits from SEPA?

Consumers are the major beneficiary of SEPA, which will offer greater choice of service, competition and flexibility. A consumer wishing to pay for services attained within any of the European countries involved in SEPA may now do so using one domestic account, eliminating the need to open a separate overseas account. It also means that people who live, work or study outside their own country may use their account in their home country to complete all their transactions. Customers can use the same payment card for all euro payments within the participating countries, making the use of cards more efficient.

Access a full list of SEPA Scheme Counties on the European Payments Council website.