e-Day, launched in September 2013 and one of the key pillars of the The National Payments Plan, comes into effect today. e-Day is a government directive whereby from September 19th 2014 (today!), Government Departments, Local Authorities and State Agencies will no longer use cheques in their dealings with businesses and all payments will be paid electronically.
A key driver is to improve cost competitiveness and security and deliver greater choice for consumers in Ireland. By deploying electronic payment facilities this will lead to a reduction in the proportion of transactions involving cash and cheques. The knock on effect of this change from cash and cheque to electronic transfer as a preferred method of payment is that it will reduce the bank charges’ cost base for the business sector. It will also speed up the payment process which is proven to have a positive impact on cash-flow.
e-Day is a welcome government-led initiative and besides the much trumpeted projected savings of €1 billion the real effect is that it will assist small businesses by ensuring that issued invoices are paid quicker. With the benefits of online invoicing added in, the positive cash-flow implications for small businesses can’t be underestimated and that is a most welcome government initiative.
As mentioned above e-Day is one of the key pillars; there are others and the National Payments Plan published by the Central Bank in August 2013 encapsulates those pillars in its vision for payments which are listed as follows:
• Electronic forms of payment will be universally accepted, and be the preferred payment choice for most;
• Irish consumers and businesses will have access to the advantages of the most innovative payment methods, and the knowledge and confidence to fully utilise them;
• Payment systems will be robust and reliable;
• Pricing for payments will foster the migration from cash and cheques to cards and electronic payments;
• Cash will remain a widely used method of payment, and must be provided in an efficient, secure manner;
• Cheque usage will fall, though will remain available to those who wish to use them, and consumers will not be obliged to discontinue using them
e-Day is a great day for small businesses that regularly deal with state agencies.