A new report says that annual savings of €1 billion could be made if people made the change from paper-based payment systems to electronic systems. That equates to €680 per household.
National Irish Bank's payments report points out that the country's payment system remains dominated by cash and cheques - which are both very expensive and slow.
The report claims that Ireland is the most intensive user of cash in Europe - Irish people withdrew over €25 billion in cash from ATMs last year. We are also the second most frequent users of cheques in the EU, after France. A total of 102 million cheques were written last year - that amounts to one tenth of the value of all cheques written in Europe in 2008.
NIB's chief economist Ronnie O'Toole says that while the Government has taken steps to reduce the use of cheques, other countries have taken more radical action, such as the UK government's committing to abolishing cheques.
Today's report urges the Government to target a 95% reduction in cheque use and a reduction of cash usage to below the European average by 2013.
In an effort to reduce cash payments, NIB says that people should be encouraged to use debit cards, while a single ATM network should be established. Retailers could also look at ways of reducing cash usage, such as card-only lanes and loyalty card bonuses for customers who pay by electronic means.
The bank also says that state agencies should stop issuing or accepting cheques while the Government should increase the stamp duty on cheques to reflect what it calls their full social cost. It also says the cheque guarantee scheme should be scrapped.
'Ireland has a culture of late payments which is putting huge pressure on SMEs,' Mr O'Toole commented. There's a strong correlation between the extent of cheque usage in a country and the time it takes for firms to receive payments for invoices,' he added.
