Why is there no digital leap card for digital wallets

The problem is that direct debits on a bank account are prone to fraud. It's a file-based system: the biller sends off all the DDs to their bank and later they are notified of payments which have failed.

There is nothing to prevent you entering an IBAN belonging to someone else. The first the biller knows about it when the payment is reversed after the real owner of the account contacts their own bank to dispute the payment. This can take up to 8 weeks.

If this happens to a utility company they have a lot of comeback: they will put your account into arrears, they can stop you moving suppliers, they can cut off your supply and they have a physical address which they supply which is useful if they want to take you to court. Similarly an insurance company can just void the policy. But providing credit for use on public transport is different. You could just register for DD using a bogus IBAN and travel around as you please. When the DD is reversed after the real owner of the account cops on and the Leap card is blocked, you just throw the card away and register a new account and new card with a different IBAN. To avoid this the NTA have implemented a process to send a code on a payment which you have to enter before the DD registration is completed. This means that if you enter an IBAN belonging to someone else you won't see the code and thus won't be able to complete the process.

The UK banks have a 'Confirmation of Payee' system where the account number and name on the mandate can be checked to ensure they match those held by the bank. This helps reduce fraud but the eurozone banks are only starting work on this.

More significantly, in many countries, like Germany, your credit score can be accessed by businesses like utilities and transport providers so they can decide to reject your direct debit mandate if you have a poor or non-existent credit history. If they do accept you but you then defraud them, the biller can notify the credit agency and, because in Germany you officially register at an address it's easy to track you down.

In Ireland however only lending institutions or yourself have access to your credit history. So the NTA has no idea if you are the completely legitimate holder of that bank account or you have defrauded every other company you ever set up a DD with. (I worked in a new telecoms provider a few years ago and up to 10% of our Direct Debits were reversed because the bank account owner wasn't the person who signed the mandate. Often the bank account owner was a charity whose IBAN had appeared on adverts looking for donations. It was very hard to take legal action in such cases: the proof of address was often forged and even when it wasn't the costs of taking legal proceeding outweighed the few hundred euros typically racked up).

For this reason some companies such as NOW TV and GoMo will only take recurring payments on a debit or credit card. The transaction costs are higher but the systems are completely online and the advent of things like the CV2 code and 3D secure have made fraud harder. I guess the NTA have decided that SEPA DDs are cheaper and they've put that system with a code in place to verify that the you have access to the account you have put on the mandate. Because it's a file-based system it takes a few days, though not 6 !

It's an Irish solution to an Irish problem.