Like their peers across Europe, Ireland’s banking sector has invested heavily in trying to persuade customers of the benefits of cashless banking. Banks across Europe are cutting costs and handling cash is bad news for bank’s bottom line.
The multi year campaign received a major boost with the arrival of chip and pin credit and debit cards, followed shortly after by the appealing and hassle free concept of contactless transactions for small payments by card and electronic phone wallet.
From a recent survey, it was found that half of all Irish adults use contactless payments or digital banking more often than they use cash, with almost two thirds making digital payment multiples times every week.
This method is popular among the younger generations since they are more comfortable with new technology compared to the older ones.
Figures published by the Ireland central bank sowed that point of spending on debit card increased 18.5% over the year to December 2019, to over 4.8 billion euros. On the other hand, credit card spending over the same time period was 8.4% higher at 1.1 billion euros.
Until now, the key appeal for consumers was that this paying method didn’t attract additional charges. But, on the very day that that the Irish banks were virtually signalling their commitment to offer relief to customers hit by corona virus, AIB became the third Irish bank to announce it was going to start charging for contactless payments.
This decision could send wrong signals to the consumers. Since consumers have got into the habit of using contactless technology, the bank is betting that consumers will continue to use contactless payment allowing the banks to profit on something that ultimately saves them money.