Payments Snapshot in Ireland: Coronavirus (COVID-19) Sector Impact

Payments Snapshot in Ireland: Coronavirus (COVID-19) Sector Impact

Summary

The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020.

The government measures to contain the virus spread are set to have an impact on the country’s economy, with the majority of the commercial activities coming to a halt. The Central Bank of Ireland estimates a decline of 8.3% in the country’s GDP in 2020 if the current containment restrictions last for three months. The central bank also expects the unemployment rate to be around 25% during the second quarter, up from 4.8% at the beginning of the COVID-19 outbreak.

In response to the resulting economic fallout, the government announced a €3.1bn ($3.5bn) stimulus package on March 10, 2020 to be spent on social protection, health services, and liquidity funding for businesses. Two weeks later, the government also announced the new COVID-19 Temporary Wage Subsidy Scheme, under which the government is offering up to 85% allowance on wage costs to businesses for 12 weeks.

This report focuses on the impact of the Coronavirus outbreak on both the economyand the cards and payments industry in Ireland. Based on our proprietary datasets, the snapshotprovides a detailed comparison between pre-COVID-19 forecasts andrevised forecasts of total payment card, debit card, and credit card transactions by value and volume. It also offers information on measures taken by the government to combat Coronavirus.

Scope

- Coronavirus will have a significant effect on consumer spending. Loss of income and increased unemployment due to the lockdown will have long-term implications affecting several sectors. According to the central bank, sectors such as distribution, transport, hotels, and restaurants will be the worst hit. The steep dive in consumer spending will also impact the payments industry as well. According to GlobalData’s 2019 Banking and Payments Survey, travel and accommodation accounted for 36% of the country’s total credit card transaction value in 2019.
- The reduced economic activities are already showing their impact on card spending. According to the central bank, the number of debit payments decreased by 33.6% and 29.0% in terms of volume and value respectively in the first week of April 2020, compared to the same period in March 2020. However, card usage is expected to recover once the lockdown is lifted.
- Ireland has a highly developed contactless card market, with the majority of consumers having access to a contactless payment card. As a result of the current scenario, the use of contactless cards for payments is expected to become even more popular in the country. Effective from April 1, 2020, the contactless card payment limit was raised from €30 ($33.68) to €50 ($56.14).

Reasons to Buy

- Make strategic decisions using top-level revised forecast data on the Irish payment industry.
- Understand the key market trends, challenges, and opportunities in the Irish cards and payments industry.
- Receive a comprehensive insight into payments market in Ireland.