Kevin Humphreys (Dublin South East, Labour)
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222. To ask the Minister for Finance his plans to abolish or phase out the use of cheques; and if he will make a statement on the matter. [38126/13]

Michael Noonan (Limerick City, Fine Gael)
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There are no plans to abolish the use of cheques. However, in line with the recommendations of the National Payments Plan, approved by the Government last April, it is intended that Government Departments, Local Authorities and State Agencies will cease using cheques in their dealings with the business sector as from 19 September 2014, with the exception of instances where electronic alternatives may not be practical. This date will be known as e-Day. This issue was also the subject of a circular by my Department on 6 August 2013 to all Departments, Local Authorities and State Agencies. A copy of this circular is available at . In order to ensure a smooth transition to the new arrangements, and to give 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. Businesses and other organisations issue about two thirds of all cheques. SMEs account for nearly 50% of all cheques issued to businesses and almost 90% of business cheques issued to other businesses. 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. While e-Day applies to all Government Departments and Offices, Local Authorities and State agencies, it is also hoped that other businesses and organisations will themselves choose to reduce the use of cheques for inward and outward payments.

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. The National Payments Plan estimates that if Ireland were to match best practice in Europe, savings of up to €1 billion per annum could be made across the economy. The 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. However, cash will remain a widely used method of payment, while cheques continue to be available for those consumers who want to use them.