Card is king but will society become a cashless one?


It’ll be no surprise to learn that the use of cash dropped by half last year compared to 2019. With lockdowns keeping everyone out of the shops, restaurants, and pubs closed, no foreign travel, and cash use discouraged to avoid infection, we all embraced different forms of payment.

The latest data from the Central Bank shows that ATM withdrawals by Irish residents fell by 40% in 2020 compared to the previous year. The data also revealed that the value of ATM withdrawals fell by 32% from the previous year to €14.7bn in 2020.

Interestingly, the average amount per withdrawal increased by 14% from €139.63 in 2019 to €158.74 in 2020. We made fewer withdrawals, but when we did take out cash, we took out more.

The big question is whether or not this trend will continue as the physical economy begins to open up again.

Rob Flynn of independent price comparison and switching site, points out that the flight from cash was already well established before 2020.

“In terms of sheer volume, card payments remained the most popular method of payment in 2020, accounting for 64% of the total number of payments — a 3% increase from 2019.

“Taking the last five years into account there has been a 79% increase in the number of card payments made, rising from 0.76bn transactions in 2016 to 1.36bn in 2020.”

Increase in saving

Interesting to note however that despite the volume of payments increasing, the value of card payments fell by 3% from 2019 levels. Mr Flynn thinks that this may be as a result of people saving more than they used to.

Meanwhile, the average credit card transaction amount fell last year from €80.24 in 2019 to €68.70 in 2020. When it came to debit cards the average amount spent came in at €40.87, a negligible increase from €40.11 in 2019.

So, in short, cards were more widely and regularly used throughout last year, with an increase in card usage for smaller amounts.

Online shopping and banking have become even more popular since the pandemic.
Online shopping and banking have become even more popular since the pandemic.

Mr Flynn says: “The figures from the Central Bank have also confirmed just how popular online shopping was throughout last year, when getting your retail fix just wasn’t possible on the high street.”

Out of the total value of card payments made in 2020, 42% were from payments initiated remotely, a 10% increase from 2019.

Nor did 2020 see any decline in the popularity of direct debits. Some €139bn was sent using this form of payment, a small increase on the previous year. The volume of direct debits also grew, by 7% to 149.6m transactions in 2020, while the average value of a direct debit payment decreased by 3% to €932 from €959 in 2019.

It’s interesting to note however that an Irish Banking and Payments Federation report published earlier this year found that only 49% of Irish adults paid energy bills using direct debit. This is surprising, considering that most if not all suppliers provide big discounts to customers who pay by this billing method.

Growth in online banks

Mr Flynn also notes the ongoing rise of the online banks, Revolut and N26. Between them, these banks now have a combined customer base of close to two million.

“A sizeable €7.2bn was paid in e-money transactions in 2020 through the likes of N26 and Revolut, with the value of transactions growing by a staggering 1,700% from €400 m to €7.2bn. The Central Bank of Ireland said that the significant growth seen was driven by an increase in the number of electronic money institutions authorised in Ireland.”

The number of payments made with e-money cards also rose rapidly — by 1,074% according to the Central Bank.

The average e-money transaction also increased from €25 in 2019 to €39.80 in 2020. However, despite the increase, the Central Bank said transactions from the fintechs (Revolut and N26) remained low-value ones. It will be interesting to see in the coming years how these figures change as more people transition to digital-only banking providers.

Not everyone welcomes a cashless society.
Not everyone welcomes a cashless society.

The aforementioned fintechs remain the only two digital alternatives to traditional banking. You can open an account in either Revolut or N26 in minutes on your phone, and both offer largely free day-to-day banking. There’s no monthly or annual maintenance fee with either provider and there’s no charge for chip and pin or contactless transactions.

Unlike most of the mainstream banks, there’s no fee for standing orders or direct debit payments either. Withdrawing cash is a bit different. With N26 you get three free ATM withdrawals a month. After that, there’s a hefty €2 charge per withdrawal. 

Revolut allows you to withdraw €200 a month or make five withdrawals. After that, you’re charged either €1 or 2% per withdrawal, whichever is higher. Both N26 and Revolut support Apple Pay and Google Pay.

While some countries did report a run on cash machine withdrawals as the first lockdowns took hold last year, there’s little doubt that the pandemic did prompt a leap towards the cashless society.


Whether transactions are carried out remotely or not, cards are more convenient than cash, and more secure too. Yes, a card can be stolen, but if the thief is to benefit substantially, they’ll also need the PIN. And it’s not difficult to get your card issuer to reverse transactions made on a stolen card.

The banks of course are all for cashlessness. It mechanises processes, has no reliance on branch banking and ends the need to transport cash. You would think therefore that they would be incentivising the use of debit cards.

However, AIB charges 20c to use your debit card to make chip and pin purchases. While Bank of Ireland no longer levies this charge, last November, they removed most charges of this nature in favour of a hefty monthly fee of €6.

Most of the other banks don’t charge for these transactions directly, but many have a similar monthly fee system in place.

Governments are even more enthusiastic about electronic payments. They make black markets more difficult to maintain. Since January 1, 2016, a government stamp duty of 12 cent applies to ATM withdrawals. This is capped at €2.50 for ATM cards and €5 for combined (ATM and debit) cards.

Meanwhile, many retailers have jumped the gun and gone completely cashless. Ikea is now only accepting card payments. 

UK lifestyle brand, Oliver Bonas, which has an outlet on Exchequer Street in Dublin, has gone completely cashless, as have some of Bear Market’s coffee shops.

Not everybody is in favour of the race towards cashlessness, however. In a world where there’s no longer any spare change, how do charity collectors or beggars or street artists get by?

Those on the margins of society, who may not have bank accounts of any kind, may find themselves suffering a new kind of exclusion if there’s a sign in every shop window saying ‘card payments only’.