The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian digital payments provider says it received “written confirmation” from the Ministry of Tourism to open an account for the Health Travel Visa just one day before tourism’s re-opening.

Kanoo, in a statement, says it received authorisation from the ministry to open the “digital merchant services account” on October 31, 2020, which was only 24 hours before The Bahamas again fully opened its borders to visitors on November 1, 2020.

“Kanoo was selected, authorised and instructed in writing by the Ministry of Tourism to process payments for The Bahamas Health Travel Visa programme,” the provider said, which included handling all debit and credit card fee payments as well as those made in Sand Dollars, the Central Bank-backed digital currency.

“Kanoo established the merchant account consistent with our regulatory requirements for account opening standards. The monthly subscription cost of the merchant account with Kanoo is $69, which was our standard published rate for a platinum subscriber on the Kanoo platform.”

Keith Davies, Kanoo’s chief executive, explained that the digital merchant services account it opened for the Ministry of Tourism was not the equivalent of a commercial bank account.

Instead, Kanoo is mandated by law and the Central Bank of The Bahamas to have a custodial non-interest-bearing bank account with a licensed Bahamian commercial bank for the purposes of settlement. Kanoo’s settlement account is with Bank of The Bahamas, and “all merchants” settle their financial transactions from that facility.

Reiterating that only clients such as the Ministry of Tourism, not Kanoo, have control over the funds in their accounts, Mr Davies said: “The Ministry of Tourism established an account with us in accordance with our laws and regulations. As far as this matter is concerned, we followed the law and are providing the services.”

He suggested that the assertion by the Auditor General’s Office that the Ministry of Tourism did not have a contract with Kanoo was akin to “splitting hairs”, and may result from its internal inspection of the ministry’s own processes and procedures - something to which he cannot speak.

“As far as the law, as far as our written contract, we have one pursuant to the merchant contractual agreement with them,” Mr Davies said. “Issue closed, matter over from our standpoint. We did everything right. We have to. We followed our rules and regulations.” Those laws are the Payments Act 2012 and the Payment Instruments (Oversight) Regulations 2017.

Kanoo has disputed the Auditor General’s findings that no contract between itself and the Ministry of Tourism was “officially executed” over the Health Travel Visa initiative. Nicholas Rees, its chairman, argued last week: “Our opinion is we did have a legal contract. The business was conducted legally.

“There were contractual terms and an agreement that was made, and it was agreed. Our position was that we had a legally binding contract. There were negotiated legal terms that the ministry wanted in place, and we had written instructions and notifications to proceed on that basis.

“We also subsequently notified in writing by the Ministry of Tourism that they wanted an addendum to the contract. We were instructed in writing or notified in writing. It was agreed and we were instructed to proceed, and were advised on paper as to use of the account. KYC (Know Your Customer) due diligence was provided in accordance with the law.”