26/08/20

FINTECH: Jamaica's financial sector moves to digitise operations.

As published on jamaicaobserver.com, Wednesday 26 August, 2020.

As the world moves towards more digital transactions, commercial banks, deposit taking institutions and independent companies have begun to offer more Visa- and Mastercard-enabled solutions to the Jamaican public. This digital development has come despite a fairly low digital presence in the country, which is being highlighted during the present COVID-19 period.

The latest commercial bank to signal its intention to switch from a Multilink card to an EMV (which originally stood for “Europay, Mastercfard, and Visa) -enabled debit card is Sagicor Bank Limited. President and chief executive officer of Sagicor Group Jamaica Limited, Christopher Zacca, confirmed at a recent press briefing that Sagicor Bank will be switching over within the next year to a Visa or Mastercard debit card which will enable clients greater reach in doing their transactions beyond Jamaica.

Zacca was unable to confirm which payment facilitator would be the lead on the debit card, citing ongoing negotiations with the companies.

Prior to 2020, only CIBC FirstCaribbean, Scotiabank and First Global Bank offered Visa debit cards with the remaining deposit taking institutions offering the Jets' Limited-owned, Multilink-branded debit cards.

Unlike Visa, which has a global reach both at physical merchants and online vendors, Multilink can only be used in Jamaica and cannot be used with online transactions.

When compounded with the fact that less than 15 per cent of Jamaica's population owns a personal credit card, there was an indirect limitation on Jamaicans who wanted to do more digital transactions rather than in person.

This problem surrounding the unbanked led to sidewinding lines which stretched for blocks during the We Care cash disbursements at various remittance providers across the country.

Although numerous remittance agencies such as JMMB Money Services Limited, Western Union, Moneygram and Ria offered the option of deposit to bank accounts directly, a very small percentage of recipients had bank accounts at the time.

This issue was also evident when people were unable to access digital services without paying through a large payment facilitator or paying at a physical location.

Some companies such as Edufocal resolved this issue of receiving payment from clients for online services through scratch cards and pin codes at point of sale terminals.

JMMB Bank launched their Visa debit card in January which was one of the few contactless EMV debit cards in the market. This was followed by Jamaica's largest commercial bank, the National Commercial Bank (NCB) which launched their EMV chip Visa debit card last month to their 500,000-plus client base.

Jamaica National Bank has hinted in some circles that they will be launching their own Visa debit card later this year.

Scotiabank recently announced a seven-year partnership with Mastercard which will include a new debit card for clients.

This shift to contactless EMV cards follows the global trend in parts of Asia, Europe and Canada where more than half of transactions are done by near field communication (NFC) enabled devices.

Apart from the large commercial banks, the Jamaica Co-op Credit Union League signed an agreement last year with Mastercard for their members to get Mastercard debit cards.

C&WJ Co-op Credit Union became the first credit union to offer a prepaid Mastercard last month to their members in Jamaica. Other firms have begun to target the underserved and unbanked in Jamaica with their prepaid debit card solutions. These include the Alliance Prepaid Mastercard offered by Alliance Payment Services Limited, Lasco Pay by Lasco Financial Services Limited, the My Cash prepaid Mastercard by Sagicor and Digicel with Mailpac Group Limited launching their own prepaid Mastercard for their client base soon.