Irish Payment Services Organisation

The Irish Payment Services Organisation Limited (IPSO) was established in June 1997.[1] IPSO was a company limited by guarantee owned by its member banks.[2]

Its primary objective was to preserve the integrity and security of the bank payment system in Ireland - the systems used for the settlement of physical cheques as well as ATM transfers and debit and credit card purchases.

History and Functions

Domestic cheques had been cleared for almost 150 years by the Dublin Bankers' Clearing Committee, sending only cheques drawn on British banks for clearing in London.[3] However, once it became clear that Ireland would join the Euro and that the United Kingdom would not do so, a formal domestic mechanism was needed to promote Irish payments interoperability and assist in the design of payment systems development, both for legacy paper instruments such as cheques and for electronic transfers such as ATM withdrawals, card payments, and internet payments. In particular IPSO was responsible for implementing rapid, and later real-time, Irish payments clearing in the transition period during which Euro area payments were being modernised.[4][3]

Ireland's clearing entities — including Irish Paper Clearing Co Ltd (IPCC), which cleared paper payment instruments such as cheques, and the Electronic Funds Transfer clearing system operated by the Irish Retail Electronic Clearing Company (IRECC) — operated under the IPSO umbrella.[5][3][2][6] Each company had its own board of directors.[7] Each bank that was a member of one or more clearing entity had a right to membership of IPSO.[8]

IPSO also provided central programme management for key national and banking-industry policy initiatives such as the National Payments Implementation Programme (the Department of Finance's initiative to move Ireland to universal acceptance of electronic payments and migrate from cash and cheques),[9][10] Ireland's implementation of SEPA (the Single Euro Payments Area, which enables customers to make cashless Euro payments to any bank account located anywhere in the Eurozone), Chip and PIN card adoption,[11] and electronic fraud prevention.[12]

Controversy over Competition

In the late 1990s, drawn by the Irish economy's rapid growth, non-domestic banks such as Bank of Scotland, KBC Bank, and National Australia Bank started to enter the Irish banking market through acquisitions as well as organic development.[13][14] These banks needed access to the clearing organisations to settle payments to and from the bank accounts they opened for Irish customers. Both bankers and the media, most notably the Bank of Scotland, alleged that the IPSO made it difficult for new banks to enter the Irish market by making it slow and expensive to join the clearing organisations.[2][15] The Irish competition authority, the Competition and Consumer Protection Commission, began an investigation into Ireland's market for retail banking services.[16][17] This resulted in changes in the structure and governance of IPSO's clearing entities, amendments to banking regulations in Ireland, and voluntary reforms by the existing Irish banks.[7]

Merger into BPFI

IPSO was integrated with the Irish Banking Federation (IBF) in 2014, which became the Banking and Payments Federation Ireland (BPFI).[18]

References
  1. "IRIS — Aachen UCD Workshop on the Shape of Inter-Organisational Information Systems". UCD School of Business.
  2. Keena, Colm (7 December 2001). "Payments system entry 'transparent'". The Irish Times. IPSO has nine shareholders. They are: AIB; Bank of Ireland; NIB; Ulster Bank; Permanent/TSB; First Active; the EBS; Bank Nationale de Paris; and the Central Bank.
  3. Bergin Cross, Caroline (2013). "The Irish Clearing System". Commercial Law Practitioner – via www.academia.edu. The Irish Real-Time Interbank Settlement Co Ltd (IRISCo) —the owner of the original Irish Real-time Gross Settlement system (RTGS)— was also originally part of the overall IPSO structure, but this company was wound up following the migration of the Irish banking community to the Eurosystem's TARGET2 RTGS system in February 2007 Cite journal requires |journal= (help)
  4. "EBA Clearing, Irish Payment Services Organisation launch STEP2 Irish service". thepaypers.com. 12 October 2011.
  5. "Indecon Report on Benchmarking of Ireland's Payments Industry" (PDF). Indecon International Economic Consultants. December 2018 – via Department of Finance.
  6. "Companies and Schemes". Irish Payment Services Organisation Limited. 18 April 2010. Archived from the original on 18 April 2010 – via web.archive.org.
  7. "Competition in the (non-investment) banking sector in Ireland" (PDF). Competition and Consumer Protection Commission. September 2005. The management and operation of all payment systems and payment schemes under the Irish Payment Services Organisation (IPSO) umbrella should be combined into one entity having a single unified Board of Directors
  8. "Ireland". The Blue Book: Payment and securities settlement systems in the European Union (PDF). European Central Bank. August 2001. Archived from the original (PDF) on 7 June 2003 – via web.archive.org.
  9. Slattery, Laura (13 January 2006). "Ipso chief aims to close off Ireland's paper trail". The Irish Times.
  10. "National Payments Implementation Programme". Irish Payment Services Organisation Limited. 30 July 2010. Archived from the original on 30 July 2010 – via web.archive.org.
  11. "AIB's Comment on IPSO". AIB Group. 21 January 2014.
  12. "The Irish Payment Services Organisation issues ATM security warning to retailers". Shelflife Magazine. 26 November 2013.
  13. Press Association (19 August 2010). "Timeline of events in bank's short history". Irish Independent. Retrieved 19 August 2010.
  14. "Bank changes name and logo". The Irish Times. Retrieved 16 October 2020.
  15. Hardiman, Cyril (5 February 2004). "Money clearing chief sets out his stall on 'closed shop' jibes". Irish Independent.
  16. "Study of the Banking Profession". Competition and Consumer Protection Commission.
  17. "Competition and Regulation in Retail Banking" (PDF). OECD Competition Committee. 27 October 2008.
  18. "Irish Banking Federation amalgamates and expands reach to Brussels". The Irish Financial Review. 9 September 2014.
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