Contactless payments strongly encouraged, especially during a pandemic
NASSAU, BAHAMAS – The Central Bank has started a consultation on a strategy to phase out the use of all national checks by the end of 2024, a move that a local fraud expert has described as a possible ‘money changer’. Game “.
The regulator said yesterday it has started consultations with banks, credit unions and other payment service providers on the matter.
The COVID-19 pandemic has also fueled increased demand for non-cash and contactless payments, paving the way for faster change.
– The Central Bank of the Bahamas
“The renewed focus on checks follows discussions with the Ministry of Finance and clearing banks in 2020 to set five-year targets to achieve a significant reduction in the use of checks and cash in the Bahamas.” , said the Central Bank.
“In the Bahamas, electronic funds transfers and other non-cash transactions are increasingly replacing payments by check.
“This reflects both the preferences of payers and the deliberate decisions of recipients – individuals, businesses and government – to stop accepting checks. “
The regulator added, “In addition, the fee structure for electronic settlements has favored non-checks, with the Bahamas Automated Clearing House (BACH) charging more for check settlements than other fund transfers.
“The COVID-19 pandemic has also fueled increased demand for non-cash and contactless payments, paving the way for faster change.
“In the meantime, mobile wallet payments are poised to be further adopted, offering more inclusive and financially interoperable substitutes made possible by the central bank’s digital currency, the Sand Dollar.”
The Central Bank noted that its phase-out strategy also proposes to provide adequate public education on the use of digital alternatives and to consider positive and consistent tariff incentive structures across the financial sector.
“Residual issues of legal clarity in regulations must also be addressed, which increasingly should be instantaneous or faster in nature; around the purpose of the process; and recourse by payers and beneficiaries in the event of errors or fraud, ”noted the regulator.
Kendrick Christie, Managing Partner of K Christie & Co Chartered Accountants and Fraud Examiners and Chairman of the Bahamas Section of the Association of Fraud Examiners (ACFE), said Eyewitness News: “It’s a good measure and a possible and effective game changer for businesses and individuals. “
They call for the pickup and deposit of checks on long bank lines. In the age of the pandemic, this is a highly risky business.
– Kendrick Christie
According to Christie, checks are ineffective and require physical signatures that can be forged.
“They call for the pickup and deposit of checks on long bank lines. In the age of the pandemic, this is a very risky business, ”said Christie.
“Checks are also prone to fraud and check float fraud, when people deliberately float a check knowing that their bank account cannot cover the checks.
“Eliminating checks will help business cash flow. Funds sent through bank accounts, Sand Dollar, digital bank type wallets, and crypto are transferred almost instantly, and business can transact faster with more cash on hand.
“Eliminating controls reduces costs and reconciliation. “
Christie added, “We at ACFE Bahamas, a member of a global body of 90,000, the Association of Fraud Examiners, wholeheartedly support this goal of the Central Bank as one of the steps to make enter the Bahamas into the digital age and increase business efficiency while reducing overall fraud. the same time.”