Just like the horse that can be lead to water but refuses point blank to drink, it appears that as a nation, we have embraced IT as the engine for our economic growth but are remarkably loath to exploit it to the fullest extent ourselves.
In the area of electronic payments, for example, a recent study has shown us to be the EU’s greatest lovers of hard cash.
According to a report carried out by consultancy, Accenture on behalf of the Information Society Commission, Ireland has the highest levels of cheque payment and cash usage in the EU. Cheque payments here represent 56 per cent of total cashless transactions in value terms and 33 per cent of the same in terms of volume. EU averages are 7 and 16 per cent respectively.
Cash in circulation outside of the credit institutions in Ireland accounts for as much as 22 per cent of the money supply here compared to an EU average of 10.9 per cent, and only 5 per cent in the UK.
Translation: compared to our European partners we prefer hard cash and firm cheques. If we can’t hold it, it would seem, we don’t want to spend it.
The Information Society Commission wants that to change and is suggesting that government takes a lead in transforming our attitudes to the point where we have a ‘world class payments environment’ in use in this country.
Among the recommendations it makes are: migrating Government payments and receipts away from paper-based processes, in partnership with the banking sector; extending this capacity to the wider business-to-business payments market; and developing a standardised payment infrastructure to support enhanced competition in the market for payments services.
Accenture estimates that a co-ordinated approach to an electronic payment infrastructure could produce savings in the economy as a whole of EUR420m per annum, equivalent to 0.3 per cent of Gross National Product.
It’s a praiseworthy attempt to encourage businesses and consumers to use technology both to simplify their processes and to make their operations less costly. And the timing, at first sight, seems to be impeccable. Just take a look at the activity in the market for business applications software.
At the bottom end, there has been severe consolidation with the likes of Sage acquiring several niche companies over the last few years. Industry giants Microsoft and SAP are also turning their gaze on this market, the former by buying up Navision and Great Plains with whose products it intends to address small to medium businesses, and the latter with its new Business One product aimed at the same sector.
At the higher end of the market there is the much publicised manoeuvring involving Oracle, JD Edwards and PeopleSoft which should see those three companies rationalising down to two or maybe even just one in the near future.
These two scenarios taken together are indicative of a business software market that is saturated at the corporate end and about to become highly competitive elsewhere. As more and more businesses acquire the wherewithal to automate ever more aspects of their business processes, then taking the final step to bring the most important process of all — payment — into the electronic arena should be a no brainer.
However, the hardest hurdle to clear may be the very reluctance of people in general to change the habits, even the bad ones, to which they have become accustomed.
For example, next time you’re at the cinema, compare the length of the queue shuffling its way to the cash desk with the empty spaces in front of the machines that print out prepaid tickets when presented with a credit card, and ask yourself what these people have against convenience and speed of service.
A campaign by the Commission to educate people about the convenience of electronic payments is to be welcomed; a willingness on behalf of traders not to scalp customers with spurious ‘handling charges’ would help too.
23/09/2003
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