Minister of State at the Department of Finance, Mr Brian Hayes, T.D., launched e-Day (19-September-2014) – the date from which Government Departments, Local Authorities and State Agencies will no longer use cheques in their dealings with businesses.
Welcoming today’s launch Minister Hayes pointed to the fact that,
“Ireland remains one of a few EU Member States still using cheques as a regular payment method. The National Payments Plan targets savings of up to €1 billion per annum by changing to electronic payments. I encourage the wider business community to embrace this concept which will ultimately be to the benefit of all businesses.”
To ensure a smooth transition to the new arrangements, and to give both the various public sector bodies and the affected businesses plenty of time to make arrangements for paying electronically, a full year’s notice of its implementation is being given.
The particular focus of e-Day is to encourage SMEs to migrate from cheque usage as they are either issuers or receivers of more than 60% of all cheques in Ireland. A shift from cheques to electronic as a preferred method of payment will result in reduced costs and improved cash-flow for the overall business sector.
However cash will remain a widely used method of payment, while cheques continue to be available for those consumers who want to use them.
This cheque reduction initiative is part of the National Payments Plan which was approved by Government in April 2013. The National Payments Plan seeks to reduce the cost of Ireland’s payment system (estimated at 1.4% of GNP) through the increased use of more efficient payment methods which will lead to increased competitiveness and efficiency.
In his remarks Minister Hayes emphasised that,
“This Plan is not about closing down options for consumers and businesses, but expanding them. Its vision is for a society where modern forms of payment will be universally accepted, and be the preferred payment choice for most.”
This initiative was also the subject of a circular (06-August-2013) by the Department of Finance to all Departments, Local Authorities and State Agencies. A copy of this circular is available at http://circulars.gov.ie/pdf/circular/finance/2013/01.pdf
26 September, 2013
NOTE FOR EDITORS
See FAQs below.
When is –eDay?
Friday September 19th 2014
What is e-Day?
e-Day is the date after which the public sector will no longer write cheques to businesses and will no longer accept cheques from businesses.
e-Day is one of the recommendations in the National Payments Plan (NPP) which was launched by the Minister for Finance in April 2013.
“The NPP recommends the initiation of an ‘e-Day’ in 2014 at which time the public sector will no longer write or accept cheques to/from business users. The particular focus of the ‘e-Day’ will be to encourage SMEs to migrate from cheque usage, as they are either issuers or receivers of 60%+ of all cheques in Ireland. An ‘e-Day’ will provide a catalyst for a broader migration in the private sector. This ‘e-Day’ will not directly affect consumer use of cheques, as the public sector will only discontinue writing/accepting cheques to/from businesses, not consumers.”
Why stop taking cheques?
Ireland is one of only a few EU Member States that still makes use of cheques as a regular payment method. The National Payments Plan targets savings of up to one billion euro per annum which can be achieved through a shift to electronic payments.
Cheques are very costly and their usage is associated with the time it takes for businesses to get paid. In Ireland there is a significant ‘late payment’ culture – it takes businesses in cheque intensive countries such as Ireland 74 days to be paid, while for the rest of the EU the average is 44 days. Further costs can be incurred through banks charges, stamp duty and postage and, most significantly, bounced cheques. These delays and costs can significantly hamper the vital cash-flow of a business.
What Should I Do to Prepare for e-Day?
If you are a consumer, there is nothing you need do as you will not be impacted. If you are a business currently being paid by, or paying to, public sector bodies, you will need to make alternative arrangements before the implementation of e-Day.
If you are currently being paid by cheque, then the best thing to do is to ensure that whoever is paying you has details of your bank account so you can be paid electronically.
If you currently pay public bodies by cheque, you will need to check with them what alternative options will be accepted. Electronic Funds Transfer (EFT), Direct Debit and Payment Card options are among the alternatives that will be offered by impacted Government Departments and Offices, State Agencies and Local Authorities. Each of these will advise its customers on what options will be available.
I am a sole trader – will I be treated as a business?
Broadly speaking, e-Day will apply if the liability to a public sector body is business-related, but not where it is consumer-related. If you are a supplier of goods or services to the public sector, receiving payment by cheque will no longer be an option after e-Day.
Will e-Day affect my Social Welfare Cheque?
No, e-Day only applies to payments to and from businesses and will not apply to Social Welfare payments to individuals.
What support will be in place for affected businesses?
A full 12 months notice of e-Day is being given to allow both the public sector bodies and the impacted businesses to prepare for the discontinuation of cheque usage. This will allow time for alternative payment options to be put in place and full information to be communicated. While most businesses are already making and receiving electronic payments, banks will be very happy to advise and support their customers who need to make the change.
Are Business Representative Groups Aware of e-Day?
Absolutely. IBEC, RGDATA and Electric Ireland are represented on the National Payments Plan Steering Committee. Furthermore, Chambers Ireland, ISME and the SFA participate in the National Payments Plan Cheque Reduction Working Group where improving the efficiency and reducing the cost of business payments is paramount.
Does my Bank know about e-Day?
Yes. All the Irish banks are aware and supportive of e-Day and the National Payments Plan in general. The five main cheque-clearing banks participate in the National Payments Plan Cheque Reduction Working Group where improving the efficiency and reducing the cost of business payments is paramount.
Your bank will be very happy to work with you in helping to move your business to electronic payments.