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The Irish authorities should take more action on payments fraud, according to nearly half of all respondents to the National Payments Strategy consultation published this week.
Other requests from respondents included more support for instant payments and, to a lesser extent, open banking.
“I was heartened by the level of interest and engagement the public had for the future of payments in Ireland,” finance minister Michael McGrath said in a press statement.
“Based on the submissions received it is clear to me that access and choice of payment methods resonated significantly with the public and therefore will be an important input in the finalisation of the National Payments Strategy in 2024.”
Respondents to the consultation included Visa and Mastercard, as well as fintechs such as TrueLayer and Wise.
The government said many submissions recommended a cross-sectoral approach to fraud prevention, involving not just banking and payment sectors but also technology companies, consumer groups, retail associations, delivery services and others.
This included the establishment of an anti-fraud forum to coordinate efforts effectively.
Participants also proposed expanding the liability for fraud reimbursement beyond the banking and payment sectors to include social media companies and others. There was also support for adopting successful anti-fraud initiatives from the UK.
This echoes initiatives from elsewhere, including the EU, where members of the European Parliament (MEPs) are pushing for more accountability from technology companies, and the UK, where the government’s anti-fraud strategy includes more scrutiny of big tech companies’ management of fraud risks.
Other commonly suggested measures included targeted fraud awareness campaigns, emphasising the importance of data-driven approaches to ensure effective communication with consumers.
In addition to fraud-related discussions, the consultation paper generated numerous policy proposals, ranging from enhancing fraud reporting requirements to using existing fraud reporting mechanisms more effectively.
Some submitters called for the development of an anti-fraud strategy and suggested measures for sharing fraud data.
Instant payments
Instant payments also ranked highly among respondents, according to the government.
Firms and industry bodies were largely in agreement that an instant payments forum should be established, with this also being referred to by some as an account-to-account (A2A) forum.
Ireland’s payment service providers (PSPs) have begun to fall behind on instant payments, particularly those that are homegrown, with UK-based fintech giant Revolut having become a success story among consumers in the country.
In their responses, several pointed out that for the forum to thrive, substantial commitment from participants was essential, including a dedication to setting and achieving ambitious goals.
They recognised that industry-led efforts alone might not suffice for the successful implementation of instant payments in Ireland, and emphasised collaboration across the sector as crucial for unlocking the full potential benefits of instant payments, beyond meeting the requirements stipulated by the EU’s Instant Payments Regulation.
A few submissions outlined specific high-level goals that this forum could work towards under the National Payments Strategy. They identified both the finance department and the Central Bank of Ireland as pivotal players in providing leadership and enabling the success of this forum.
In addition, civil and consumer groups highlighted the importance of incorporating the consumer perspective into the forum's discussions.
Submitters stressed the significance of consumer trust in instant payments, emphasising the importance of a smooth user experience to encourage adoption. Meanwhile, smaller financial firms particularly emphasised the importance of ensuring an easy and intuitive user journey.
Retailer groups meanwhile underscored the potential cost savings associated with instant payments compared with existing digital payment methods and cash, and welcomed the prospect of a greater variety of payment options for both consumers and retailers.
Several submitters also advocated for public education campaigns to raise awareness about the benefits and challenges of instant payments, aiming to instil confidence and empower consumers to embrace this payment method.
Open banking
The Irish government said that open banking received less input than other topics such as instant payments and fraud. But slow take-up remains an issue in the country, as it does across Europe.
Respondents highlighted several obstacles hindering the adoption of open banking in Ireland, including issues with user experience such as unnecessary disruptions to services and complexities in the authentication process.
Outdated technologies like one-time passwords and card readers were identified as culprits, affecting not only open banking but also consumers' overall payment experiences.
Additionally, concerns were raised about the provision of data to open banking providers, with some respondents noting slow resolution of issues and fragmented application programming interfaces (APIs) causing delays in data processing.
Some suggested that the central bank should collect and publish data on open banking usage to better understand its uptake and enforce legislative requirements. There were also calls for data analysis and setting expectations regarding open banking user experience.
Further, respondents raised concerns about insufficient enforcement of open banking rules and advocated for phasing out outdated technologies like card readers.
Consumer protection emerged as another prominent concern, with worries that some consumers might find open banking confusing or too technical, preventing them from fully benefiting from its services; and respondents were apprehensive about centralising banking services, potentially exposing vulnerable groups to financial abuse.
As with fraud and instant payments, respondents widely agreed that collaboration was needed to address these challenges and drive the development of open banking in Ireland.
Calls were made for a collaborative forum involving stakeholders to tackle issues such as user experience, API standardisation and consumer education. For example, the European Payments Council’s SEPA Payment Account Access (SPAA) scheme was seen as a potential framework to support uniform implementation of open banking.
