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Dynamic Financial Payments Industry can attract investment, foster Irish start-ups and create quality jobs

E-Payments Conference: ‘Scaling and Collaboration’

SPEECH BY GED NASH TD, Minister for Business and Employment

9th October 2015

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Good morning, ladies and gentlemen, and welcome to Drogheda. 

Today’s conference has been organised by The Mill, Drogheda’s enterprise hub. 

The Mill is all about the creation and growth of healthy new enterprises, about entrepreneurship and innovation in South Louth, East Meath and Drogheda. 

The Payments Industry occupies a core interface between financial services and technology. 

Its shape and scale has become a key indicator of the health and the direction of the global economy. 

As you know, Ireland already hosts many of the world’s leading global payments companies, including both Irish owned companies and foreign owned multinationals. 

And, given that all politics is local, I am particularly pleased, as a public representative for this constituency, to see this sector making its home in Louth. 

Your industry has shown strong growth in recent years and all the signs are that it will continue to grow and to offer new market opportunities and, of course secure and well-paid employment opportunities. 

International payment services have been a growth segment within the international financial services industry over the last number of years. 

Advances in technology, security, and regulatory initiatives such as the EU Payment Services Directive, have meant that the number and value of payments that are carried out electronically has risen significantly – and will continue to grow. 

There is now a strong ecosystem of overseas owned payments companies based in Ireland including Paypal, Chase Paymentech, Mastercard, Elavon Financial Services, and today’s sponsors Vesta Payment Solutions. 

We also have an indigenous payments industry. 

It has, I believe, established a good international reputation. 

Ireland now has a competitive cluster of around 25 indigenous companies in the payments sector. They exported about €350 million in 2014 and they employ approximately 2,000 people. 

Payments companies are, in the nature of things, international. 

This means that exports accounted for well over 50% of total output. 

And we have strong capability in specific sub-sectors such as dynamic currency conversion, PCI compliance, prepaid cards and payment processing solutions. 

Your conference will deal with the possibilities of scaling and collaboration in the industry. 

These are important questions for a sector which has appeared somewhat fragmented, where it has seemed difficult to establish clusters. 

I know that the payments sector is diverse. 

You use a range of innovative financial technology solutions to support and process efficient payment for goods and services, nationally and internationally. 

You may be processing cash, credit or debit cards, direct debits, money transfers, or mobile payments. 

Some of these services overlap, while others do not. 

Some of you must be licensed and regulated and others not. 

To date 9 payment institution licences have been issued by the Irish Central Bank, 4 of which are to indigenous companies, authorising them to provide and execute payment services throughout the European Community. 

The pace of change globally is of course accelerating. 

Technological developments, including in particular the pervasive use of smartphones, have resulted in new and more efficient ways to pay. 

The traditional banking structures are challenged by new payment models based on modern technologies, such as instant payments, contactless payments, e-wallets, mobile accounts and even cryptocurrencies. 

I believe Ireland has a strong supply of entrepreneurs willing to lead new FinTech companies and to develop new payment solutions. 

For us to continue to establish, retain and scale innovative payments companies and grow as a payments hub, we need to ensure a co-ordinated approach. 

The International Financial Services Sector Strategy, IFS2020, was launched last March. 

The strategy is based on the Action Plan for Jobs model, which is to say it is action-oriented. 

It sets out a clear vision for the sector for the next five years and this includes an ambitious target to create 10,000 net new jobs in the sector by 2020. 

A significant number of these jobs will be in the regions. 

One of the key challenges identified in the strategy is the need to leverage our unique ICT and international financial services clusters so that we become a global leader for fintech. 

As part of IFS2020, both Enterprise Ireland and IDA Ireland are working with industry groupings such as the new Fintech & Payments Association and the Banking and Payments Federation of Ireland to co-ordinate a sector-wide discussion and review of the payments industry in Ireland. 

This will inform the development of a sectoral strategy, which will outline a coordinated national approach to the future of the payments industry here. 

I very much hope today’s conference discussions will feed into that debate and inform our final thinking. 

Last month saw a progressive step being taken, with the setting up of the new single representative body, the Fintech and Payments Association of Ireland. 

It will act as a trade association for all the stakeholders involved in financial technology and payments in Ireland.

I note with interest that the new association is explicitly open to all fintech and payments companies, from start-up level to fully-fledged multinationals. 

It has said it will look to encourage software and app developers as well as established institutions such as banks, legal firms and governmental departments. 

I agree with my colleague Simon Harris that the launch of the FPAI is an important step forward for an increasingly influential sector. 

It is a strong signal to the international fintech community of Ireland’s ambition in this area. 

And I agree with Minister Harris’ views that the actions set out in IFS2020 will ensure Ireland is well-placed to take advantage of the job creation opportunities in this dynamic sector. 

Together with a more tightly coordinated public sector, Ireland will continue to attract high quality investment and continue to foster more Irish start-ups and SME growth. 

Thank you for your attention. 

I wish you a successful day.