Steering committee on cheque reduction endorses strategy to strengthen domestic payments environment
NASSAU, BAHAMAS — The Central Bank said yesterday that ‘steady progress’ is being made toward the goal of reducing cheque usage in the country, noting that a legal opinion outlining the optimal approach to implementing regulatory changes necessary to support a reduction in cheque usage has been drafted.
The regulator yesterday also noted that a public education campaign is set to formally launch in May 2024, with a significant emphasis on encouraging increased utilization of digital payments and digital financial services.
The Central Bank indicated that since its inception in February 2023, the Steering Committee on Cheque Reduction has steadily progressed towards its overarching goal of framing and guiding the strategy for reducing cheque usage in The Bahamas.
The regulator noted that over the last year, the Committee conducted various research initiatives to ascertain the consumer experience as it relates to banking and payment services.
“In particular, the Central Bank, in partnership with the Bahamas Chamber of Commerce and Employers Confederation, surveyed the business community on their experience with opening business accounts at commercial banks, to gain an appreciation for the turnaround time associated with this process and the sentiment around the ease of doing business. In addition, it is vital that the Committee understands the time and cost associated with cheque payments as compared to alternative payment methods from both the demand and supply sides, in order to position a balanced strategy. To this end, the Committee also surveyed commercial banks and the business community on the fees associated with cheques versus other payment solutions, the time it took for final availability of funds across each payment method, and the processes involved to settle varying payment types.” the Central Bank stated.
The regulator noted that based on the results of various surveys and discussion points raised at a domestic payments system retreat, the community communicated a general readiness, but noted that there was still a strong need for enhanced education on alternative payments and increased regulation related to cost.
“On the regulatory front, the Committee, through its Legal and Regulatory Working Group, is working closely with an external legal consultant to enable a reduction in cheque usage in The Bahamas. To-date, a legal opinion, which frames the best approach for effecting the regulatory changes required to support a reduction in cheque usage, has been drafted and more selective engagement on this matter is planned with stakeholders, such as the business community,” the regular stated.
It was also noted that moving forward, the Steering Committee has endorsed a three-pronged strategy to strengthen the domestic payments environment, with concrete deliverables through 2026. A public education campaign will launch formally in May with a heavy emphasis on promoting greater use of digital payments and digital financial services.
“On access to payments, alongside general stress on financial inclusion, the Central Bank will identify further scope to ease on-boarding rules for the opening of deposit accounts for individuals and businesses. The Bank will also consider tighter rules to govern minimum affordability of, and basic access to accounts for individuals; and ensure that all banks and credit unions provide universal access to the digital currency,” the Central Bank.
The regulator added: “On payments system performance and cost, the Central Bank is committed to work with banks, credit unions and other payment services providers to develop a real-time, fast payments network, to allow instant settlements across both digital wallets and deposit accounts, including for inter-bank transfers. Strengthening this infrastructure is also geared towards ensuring that The Bahamas is sufficiently prepared to benefit from the G20 countries’ roadmap, by 2027, to lower cost and improve speed, transparency and access to international payments. The payments system work will also identify targeted improvements in the environment around banking sector practices affecting the ease and transparency of cheque usage.”
