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50% cash use fall 'ambitious, not impossible'

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Gowon Bowe

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The government's target to reduce Bahamian society's cash use by 50 percent within the next five years is "ambitious but not impossible", a well-known banker said yesterday.

Gowon Bowe, Fidelity Bank (Bahamas) chief financial officer, told Tribune Business that the COVID-19 lockdown had shown such rapid payments system modernisation was achievable given how quickly Bahamians had adjusted to settling transactions by digital means.

And he revealed had had been "shocked" when he learnt that the BISX-listed bank was still settling the majority of its bills by cheque when it should be "setting the example" for businesses and individuals to switch to electronic payments.

Speaking after K Peter Turnquest, deputy prime minister, also disclosed that the government was aiming to cut cheque usage by 50 percent within three years, Mr Bowe said: "It is certainly not an unrealistic target. Is it ambitious? Yes, but the last two months have demonstrated it's not impossible...

"As chief financial officer at Fidelity, I was shocked at the amount of bills we were settling by cheque. That was an eye opener for me. I said to my team that by June [2020] I don't expect to be paying anyone by cheque. As a bank you have to set the example. If, as a financial institution, I am encouraging my clients and business customers to move electronically, I should be setting the example.

"I have laid down that if anyone is paying by cheque after June has to give me a very valid cause for doing so.... BPL has an online payment facility with us, but we were cutting cheques to BPL."

Mr Turnquest yesterday unveiled the Government's goal to accelerate the transition to digital transactions during the 2020-2021 Budget presentation, lamenting that efforts in this direction to-date had lacked co-ordination between the Government, Central Bank and industry players.

"We recognise that although the Government, the private sector and the banking sector have all been working toward greater use of digital transactions for payments, these efforts have often been siloed - running on separate tracks, and moving at different paces," he told the House of Assembly.

"The lessons of Dorian - and presently of COVID-19 - have demonstrated that as a matter of national priority, the various stakeholders need to collaborate and move in unison to accelerate the adoption of digital payment systems. Yes, it is a matter of national efficiency and national competitiveness but, as recent hurricanes and the current pandemic have shown us, it is also a matter of national security."

Revealing that the targets had been set in conjunction with the Clearing Banks Association and Central Bank, Mr Turnquest added that they involved "a 50 percent reduction in the utilisation of cash within the next five years, fuelled by more transparent business and consumer friendly regulations around the use of debit and credit cards, and the full integration of the Sand Dollar [Central Bank digital currency]".

As for cheques, Mr Turnquest said they were eyeing a "50 percent reduction in three years, and 80 percent reduction in five years, boosted by greater utilisation of the electronic clearing house to allow for direct payments".

He added: "Setting these targets and establishing a task force to make this happen will ensure that we can, in a measurable way, determine our success in removing the legal, bureaucratic and even cultural obstacles in the crucial shift to digital transactions.

"The aim of this initiative is not to eliminate the use of cash. Cash will continue to be a feature of the payment system. However, the further entrenchment and utilisation of digital means has the opportunity to expand financial inclusion, to open new business opportunities, to bring sophisticated financial services to even the most remote parts of the country and to improve personal and business security.

"The work of the imminent Task Force will be to engage business communities and civil society to ensure appropriate attention to privacy, cyber security, as well as to ensure a proper understanding and buy-in of this initiative by the general public."

Comments

Proguing 2 years, 4 months ago

Coins and banknotes are the only form of legal tender.

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Clamshell 2 years, 4 months ago

LMAO. This guy apparently has never been anywhere near the Out Islands.🤣

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joeblow 2 years, 4 months ago

Maybe they should stop charging $50 to cut cheques to brokerage account holders as well!!

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Porcupine 2 years, 4 months ago

Bank of Bahamas, our national bank, leads the nation in their slowness to enter the 21st century. Andros remains in the last century.

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