Circular 1/2013: Issue and Acceptance of Cheque Payments By Central Government, Local Authorities and State Agencies from businesses ‘e-Day’ – 19 September 2014



The Department of Finance yesterday (22 May 2014) issued a reminder to  all Government Departments and Offices, Local Authorities and State Agencies that the above Circular (see link) comes into effect on 19 September 2014. The Circular envisages that from that date the public sector will no longer write cheques to business users, nor will the public sector accept cheques from business users. The particular focus of ‘e-Day’ is to encourage SMEs to migrate from cheque usage.

The Department’s reminder letter to Accounting Officers attaches a Guide produced by the Programme Office of the National Payments Plan setting out a number of payment options with pros and cons as they relate to the operations of State Agencies (see link).

Accounting Officers are encouraged to consider the needs of people with disabilities when deciding on what payment options are going to be offered.

e-Day is an important part of the NPP plan to reduce costs and improve cash-flow in the Irish economy.  e-Day was launched in September last year, to give businesses and public sector bodies 12 months to prepare for the smooth transition to electronic payments.  Cheque usage has halved in Ireland since 2005 but Irish businesses still write 33 million cheques every year.

The NPP notes that businesses and consumers will benefit when Ireland reduces its dependence on cheque and cash payments, to safer and more efficient electronic payments.  Cheques are an expensive means of payment for businesses because of bank charges, stamp duty, postage, time spent making lodgements, unpaid cheques, and the ‘cheque is in the post’ culture of late payments. Businesses in most other EU countries have stopped using cheques.

Businesses are advised to prepare for e-Day by discussing payment solutions with their contracting Government body and their banks.

e-Day will not affect consumer cheque usage, such as social welfare payments or pension payments.

23 May 2014