NASSAU, BAHAMAS – Reducing government taxes on card transactions could help alleviate the high cost related to the usage of electronic card facilities, according to a leading fraud examiner and accountant.
Kendrick Christie, principal of Kendrick Christie & Co, explained those high costs were among the ‘chief concerns’ of small and medium sized business operators as he the government’s digitization push.
Christie said: “This is a step in the right direction and I commend the various ministries and agencies for putting quantifiable objectives for instance, the reduction of checks by 50 percent. I suggest that these metrics be measured to every great extent each quarter and reported on by Central Bank in a Digitization Report.”
He said: “It is very critical that The Bahamas moves to more online and e-commerce. Apart from reducing the cost of doing business, fraud and robbery, it also facilitates commerce from our tourism market as many of our visitors are immersed in debit and credit card usage. This can only bode well for us as a country.”
During the 2020/2021 budget communication last week, Deputy Prime Minister and Minister of Finance K Peter Turnquest noted that the Ministry of Finance together with the Clearing Banks Association and the Central Bank have established targets to reduce cash and cheque utilization across the country.
According to Turnquest, a 50 percent reduction in the utilization of cash within the next five years is being targeted, as well as a 50 percent reduction of the utilization of cheques in three years and an 80 percent reduction in five years.
Christie continued: “Including small and medium enterprise (SME) owners on the task force who can help pinpoint the challenges around moving to full e-commerce platforms.
“One of the chief concerns of SME owners is the high cost around usage of electronic card facilities including the visa fees hovering around three percent and the government VAT and stamp taxes as well as implementation costs.”
He said: “However, I believe the task force can identify ways to overcome this concern by recommending reduction of the government taxes on card transactions. Also, digital currency can be a viable and less expensive alternative to card payments. Above all SMEs need to understand the costs of cash control whether armoured car services and theft costs.”
Christie further noted government should ensure that all government ministries and agencies have e-commerce platforms and are capable of accepting card payments.
“For instance, the Ministry of Foreign Affairs only accepts cash for apostille and other legal payments by law firms,” he said.
“This means law firms have to cash cheques and take the cash to the Ministry for payment.This can be hundred of thousands of dollars for any one law firm and is unacceptable in today’s age. Fraud and error are surely occurring around this whole cash only policy. This needs to end if the task force is serious about e-commerce.”
Christie said: “We must look at this overall as a digitization process and look at everything government does and move all of it online. For instance NIB applications were all done online and documents uploaded. This must be the norm. All other Government agencies and ministries must undergo this digitization eliminating paper, ensuring websites are accessible and even having chat assistance available for persons who visit their sites and need assistance.
“We must ensure that commerce as a subject is taught in the primary and high schools. We need our young people learning about e-commerce solutions from. an early age.
Christie also suggested banks should encourage to reduce online fees; make it mandatory for every company to have online banking; and also eliminate the requirement to come into the bank to fill out a form to sign up for online services.
“We must embrace the technology and make it easier for persons to sign up for online services especially since their accounts have already been verified,” he said.
“Chip and pin services are the order of the day. These reduce skimming and replication of cards. It’s time for RBC to step up and make all debit cards chip and pin.
“They are the nation’s oldest bank and there is no reason for this bank to still crank out a debit visa card with magnetic strip technology which is easily skimmed and is below the security standards of the world. This is a disservice to its thousands of customers.”
“The task force and clearing banks needs to apply pressure for this to happen in 2020,” added Christie.