Consumers show strong preference for contactless payments – BPFI Payments Monitor

Consumers make close on 1 million contactless payments per day in 2018

Irish enterprises record the highest percentage of online sales in the EU

Consumer preferences for contactless credit and debit card payments, as well as for digital banking payments, are very evident from the latest BPFI Payments Monitor pubished today by Banking & Payments Federation Ireland (BPFI).  This shows that during the second half of 2018 the volume and value of contactless payments both grew by almost 60%; and digital banking payments were up 12.6% over the same period.

Tracking key trends across a range of payment categories including contactless payments, digital banking, debit and credit cards, ATMs, cheques and cash, the BPFI Payments Monitor presents some key highlights as follows:

  • Some 364 million contactless payments to the value of more than €4.4 billion were made by consumers during 2018 – that’s almost 1 million contactless payments per day.  Growth in contactless payments continues apace – by almost 60% during the second half of 2018.
  • Consumers used digital banking (personal online or mobile banking) to make 93.7 million credit transfers during 2018.  Growth remains strong – up 12.6% during the second half of 2018.
  • Over one third of consumer debit card spend and almost a half of all personal credit card spend during the first quarter of 2019 has been through eCommerce – as distinct from physical point of sale.  In fact, the use by Irish enterprises of online as a sales channel is the second highest in the EU, according to Eurostat; and, at 35%, the percentage of total sales transacted online is the highest in the EU.
  • Consumers’ love affair with cash continues: some €19.9 billion was withdrawn from ATMs in Ireland during 2018, according to figures from the Central Bank of Ireland, with a significant increase to €133 on average in the amount withdrawn during the final quarter of  2018.

Speaking about the development by banks across Europe of instant payment platforms for consumers,  Richard Walsh, Head of Digital & Payments Strategy, BPFI stated:

Ireland can point to several developments on this front.  The five main retail banks here recently provided BPFI with a mandate to examine the development of an industry-wide consumer and merchant mobile-based payment proposition for the Irish market.  The banks have also agreed a timeline for the delivery of real-time payments for the Single Euro Payments Area (SEPA) and the introduction of SEPA Instant Credit Transfer (SCT Inst) in Ireland.”

 “Coupled with clear appetite on the part of consumers for mobile-based, instant payment solutions, this provides the basis for an innovative payments infrastructure that should serve the country well into the future.”

 The BPFI Payments Monitor is available on the BPFI website here.

 

Notes: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland.  Together with its affiliates, the Federation of International Banks in Ireland and the Fintech & Payments Association of Ireland, BPFI has some 100 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

Based on data from BPFI member banks and Central Bank of Ireland, the BPFI Payments Monitor  provides a comprehensive picture of the various means of payment executed via the various payments systems in Ireland. The report, and the BPFI payments data series, are available on the BPFI website here [https://www.bpfi.ie/publications/bpfi-payments-monitor/].

Contact: Jillian Heffernan, Head of Communications, 087 9016880 or jillian.heffernan@bpfi.ie

Mortgage Approvals: solid year-on-year growth, especially for first time buyers

€931 million worth of mortgages approved in April

Banking & Payments Federation Ireland (BPFI) has published the latest figures from the BPFI Mortgage Approvals Report for April 2019.*

The following are the key elements:

  • A total of 4,109 mortgages were approved in April – some  2,111 (51.4% of total volume) were for first-time buyers (FTBs) while mover purchasers accounted for 1,078 (26.2%).
  • The number of mortgages approved fell by 0.8% month-on-month and rose by 9.5% year-on-year.
  • Mortgages approved in April 2019 were valued at €931 million – of which FTBs accounted for €492 million (52.9%) and €272 million (29.2%) by mover purchasers.
  • The value of mortgage approvals rose by 1.1% month-on-month and by 10.5% year-on-year.

Re-mortgage/switching approvals rose on a year-on-year basis – by 11.3% in volume and by 9.6% in value terms.

There were 46,901 mortgage approvals in the twelve months ending April 2019, valued at €10,421 million. Annualised mortgage approval activity increased in volume terms by 0.77% compared with the twelve months ending March 2019 and increased in value terms by 0.86% over the same period.

Commenting on the figures, Felix O’Regan, Director Public Affairs stated:

“The latest figures show good year-on-year growth of 9.5% and 10.5% in the number and value respectively of mortgages approved by lenders during April 2019.  This growth is particularly evident in the case of first-time buyers where the 23.2% uplift in the value of approvals in April 2019 compared to April 2018 represents the strongest rate of growth since October 2017. A comparison of the April figures with the previous month (March) shows weaker growth, and even decline in some categories.  However, the year-on-year comparison provides a more reliable picture of overall mortgage market performance because of the volatility that can arise from one month to another.”  

Data collection for the BPFI Mortgage Approvals Report began in September 2012 covering the period from January 2011 onwards in respect of the market’s main mortgage lenders. The BPFI Mortgage Approvals Report April 2019  as well as the time series data file is available on the BPFI website here.

 

[*] The full time series of monthly data from January 2011 onwards is available on the BPFI website.

Note: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland.  Together with its affiliates, the Federation of International Banks in Ireland and the Fintech & Payments Association of Ireland, BPFI has 100 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

Contact: Jillian Heffernan, Head of Communications, jillian.heffernan@bpfi.ie 087 9016880

BPFI Safeguarding Customers Guide

As the latest Safeguarding Ireland awareness campaign gets underway highlighting the issue of abuse of vulnerable adults, BPFI is reminding consumers of its safeguarding guide which provides advice on protecting against financial abuse.

Published by BPFI and its member banks with guidance from Safeguarding Ireland, the Guide to Safeguarding Your Money Now and in the Future, provides advice to consumers on how to prepare for a time when assistance may be needed to manage their money. It also seeks to raise awareness of financial abuse and fraud, which can impact on anyone regardless of wealth or age.

The guide, which has achieved the Plain English mark from Nala, can be downloaded here and is available from banks and the offices of many NSC members, including HSE Safeguarding Teams across the country. It was developed by BPFI and participating banks AIB, Banking of Ireland, KBC, permanent tsb and Ulster Bank. The guide encourages customers to take control of their banking and to be aware of the risk of financial abuse, which unfortunately can be committed by people known to them.

BPFI participates in the National Safeguarding Committee which seeks to promote a culture of safeguarding vulnerable customers and whose participants include the HSE, many advocacy bodies and charities, as well as service providers and An Garda Siochana. Raising public awareness of financial abuse is key to safeguarding customers and to this end the National Safeguarding Committee has played a crucial role in informing BPFI and members of the experience of adults at risk.

Download the Guide here.

Energy Efficient Mortgage Initiative

The European Mortgage Federation-European Covered Bond Council (EMF-ECBC) recently held an excellent seminar discussing sustainable finance and energy efficiency. During the event, the ongoing standardised energy efficient mortgage pilot was welcomed by the European Commission, the Executive Agency for Small and Medium-sized Enterprises (EASME), the European Bank for Reconstruction and Development (EBRD) and the European Banking Authority (EBA) among others.

BPFI is following progress of this initiative with interest to better understand possibilities for developing products to retrofit homes and improve the energy efficiency of buildings in Ireland, thus contributing to efforts to de-carbonise the economy.

Some  45 European lending institutions participating in the Energy Efficient Mortgage Initiative (EEMI) pilot, joined by 32 supporting organisations throughout the EU and by 12 national, European and international institutions in the Energy Efficient Advisory Council.

Tallaght Students represent Ireland in Money Quiz Finals

Tallaght students Daniel Olusegun and Darragh McGourty represented Ireland in the finals of the European Money Quiz 2019, a European-wide financial education competition in which more than 100,000 secondary students across Europe competed. The first-year business studies students from Firhouse Community College, Dublin 24 participated in the live finals in Brussels hosted by the European Banking Federation (EBF) and featuring teams from 28 different countries across Europe.

The European Money Quiz is a European-wide competition which aims to promote financial literacy among students aged between 13-15 year olds. Designed by national banking associations across Europe, including BPFI, it is coordinated by the EBF.

In March, BPFI hosted the Irish heats of the quiz when hundreds of students in classrooms across Ireland played the quiz simultaneously in an innovative real time Kahoot! Webcast on YouTube. Students, in teams of two, had to answer a range of financial education related questions with the winner being the team to answer the most correct questions in the fastest time. In total over 100,000 students competed in the quiz at national level in their respective countries.

Stakeholder Engagment

Our recent engagement with public representatives has included communications with Deputy Billy Kelleher and Deputy Anne Rabbitte, both candidates in the European Parliament elections, on the issue of Fianna Fáil’s commitment to promoting a single EU mortgage market – which BPFI supports in principle; also  on the related matter of the real factors driving average mortgage rates in Ireland.  In addition, information has been furnished to  Deputy Willie Penrose  on the issue of banking sector support for small businesses and local communities; not just the direct support provided by banks but the considerable indirect support provided through the sector’s funding of Social Finance Foundation (www.sff.ie) and Microfinance Ireland (www.microfinanceireland.ie).

Independent Non-Executive Directors (INEDs) from international and retail banks participated in our most recent INED Forum.  A presentation from Brian Hayes (BPFI’s incoming CEO) on the likely future direction of the EU legislative and regulatory agenda and implications for the banking sector and the role of INEDs gave rise to a lively and engaging discussion.

Second Payment Services Directive – PSD2

The second Payment Services Directive, PSD2, will come into full force on 14 September 2019, the aim of which is to provide enhanced security to customers and protect against fraud in the new and fast paced digital and innovative market place. Customers may experience changes to how they access and use their online banking channels and apps, and how they shop online.

BPFI is currently working with its member banks in  developing  a public awareness campaign which will seek to highlight the changes which customers may see as a result of these developments. This is in addition to the direct customer communication which individual institutions are undertaking.

BPFI is also working with the relevant stakeholders to help ensure retailers with online shopping channels to their customers are fully prepared for the changes.

Distance Marketing of Financial Services

BPFI is currently engaging with  members on the recently published consultation on the evaluation of the Distance Marketing of Financial Services Directive by the European Commission with a view to submitting an industry response ahead of the 2 July deadline.

The paper is aimed at consulting stakeholders with a view to issuing a final Commission document by the end of 2019 on whether or not to pursue the review.

The consultation looks at the main changes that have impacted the market, the benefit of the Directive and its coherence with other sector specific EU legislation such as the CCD (Consumer Credit Directive) and PAD (Payment Accounts Directive)

At the same time, the EC also published findings of the behavioural study on the commercial practices used for distance sale of retail financial services.   This study included a behavioural experiment which tested two products: a current account and a personal loan.

Key results of the study include:

  • Information documents were found to “significantly improve” consumers’ choices. However, “other remedies (e.g the comparison table) were found to be even more effective”. The report suggests providing information early, clearly, and in a manner adapted to the consumers device.
  • Personalisation and targeting are treated suspiciously by consumers. However, evidence on the impact of these practices is mixed.
  • The distance marketing of financial services directive continues to be relevant. However, the report notes that “some updates to it with respect to information requirements might be beneficial”.