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Two-thirds say Bahamas can end cheques by ‘26

The Central Bank of the Bahamas.

The Central Bank of the Bahamas.

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Almost two-thirds of Bahamians believe this nation could be ready for the elimination of cheque payments within the two-year deadline set by the Central Bank to review its goal.

The banking regulator, unveiling the findings from a survey of 1,030 persons which likely influenced its decision to drop the original end-2024 deadline, said only 8 percent of respondents believed this ambition would require a long-term effort lasting five years.

“An estimated 63 percent of respondents believed The Bahamas could be ready for cheque elimination in less than two years,” the Central Bank report on the findings disclosed. “Some 38 percent believed that The Bahamas could be ready in less than 18 months, while 25 percent believe the change could be accomplished within 18 months to two years. Only 8 percent believed that a timeline of more than five years would be required.”

The Central Bank last year announced it had abandoned its original target of eliminating paper cheque use by year-end 2024 because “a compelling fraction” of Bahamians need more time to adjust, its Governor affirmed.

John Rolle, in a brief statement responding to Tribune Business questions, after the banking regulator disclosed the initial timeline has been “deferred” and will now be “reassessed” in 2026, explained that the change had resulted from feedback provided by the public and businesses.

“There was a compelling fraction of the public who wanted more time to transition away from cheques. The Central Bank and financial institutions will provide more details on what the interim milestones are that are being targeted for progress on payments system developments,” he said.

The Central Bank, in a release on the issue, said the deadline shift resulted from a “consensus” among members of the Steering Committee appointed to oversee the transition away from cheques that more time is needed to ready and educate Bahamians. The delay will also give Bahamian commercial banks and other financial providers more time to better roll-out the digital payments infrastructure that will replace cheques as a means of settling transactions.

The survey results, meanwhile, revealed that “just 1 percent of Bahamian residents reported (personal) cheque use in the six months prior”. The Central Bank added: “Of individuals surveyed, 8 percent reported using a cheque for payment in the previous 12 months. This represented a significant decrease compared to the 20 percent of persons who had reported cheque usage in a previous study” in 2020.

It added: “The rate of cheque usage was greater amongst older individuals (35 years and over) compared to their younger counterparts. Also, the usage rate increased for persons disclosing higher annual household incomes, at 7 percent for those in the category $30,000 to $60,000 per annum versus 13 percent for those making $60,000 or more per year.

“Meanwhile, 13 percent of those identified as business owners reported using cheques for payment in the previous 12 months... The most common items paid for via cheque were utilities, insurance, rent/mortgage and professional services. These items tend to be costlier, semi-regular payments.

“Individuals reporting an annual income of less than $30,000 were more likely to use a cheque to pay for utilities than any other item. Middle-income earners mostly used cheques for professional services, housing, insurance and large consumer goods. Top income earners most frequently used cheques for the payment of rent or mortgage, small consumer goods, professional services, and entertainment.”

While the majority of cheque users, some 84 percent, said they used the instrument because it provides proof of payment, 87 percent of total survey respondents added “that cheque elimination would not impact them directly, although business owners reported the highest perceived personal impact.

“Further, 22 percent of respondents believed cheque elimination would impact someone familiar to them. The survey results indicated that 54 percent of individual respondents were against cheque elimination. Interestingly, when assessed by income level, top-earning respondents appeared slightly more in favour of elimination,” the Central Bank said.

“According to the survey results, cash remained the payment instrument most commonly used in The Bahamas. Following this, indications are that debit cards are the next most common instrument used, trailed by credit cards and electronic fund transfers. Cheques usage paced behind electronic instruments, but still significantly ahead of mobile wallets.

“While most surveyed individuals did not believe that they would be directly impacted by cheque elimination, a greater fraction of such respondents predicted that someone familiar to them would be impacted. Meanwhile, preference for continued cheque usage registered slightly higher among those who identified as including business owners.”

Comments

bcitizen 1 month, 4 weeks ago

Makes perfect sense, now businesses can tote around thousands of dollars in cash to make payments that currently checks are used for that cannot be paid by other means. If people are not really using checks what is the drive/motive to eliminate them? Not everywhere takes credit cards including the government in many instances. The government itself pays most merchants with check.

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realitycheck242 1 month, 4 weeks ago

You missing the point ...most people "wire transfer" these days

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bcitizen 1 month, 4 weeks ago

I do allot of wire transfer payments to vendors but, every now and then be it the bank or for some reason, glitch, or whatever the payments will not go through and I have had to resort to check. This includes our new illustrious business license who credit card system does not work and the bill payment online via the bank would not work. If these people want to go cash and checkless then they really need to do major upgrades to digital/online payment systems. We are in the dark ages compared to other places for easy of transactons.

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birdiestrachan 1 month, 4 weeks ago

The headline is disingenuous it is not two thirds of the population I disagree with stoping cheques They got rid of cents ,soon cheques they want to appear as if they are doing something the bank will have to issue cheques for large amounts

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truetruebahamian 1 month, 4 weeks ago

There is a necessity for cheques, whose short sighted idea was it to ban them? This two thirds contrivance is nowhere close to the truth with persons to whom I have spoken on this subject. It is a 100% agreement that cheques are a necessity and should never be banned.

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killemwitdakno 1 month, 2 weeks ago

When the power is out, when the card machine is down, when there's no local bank for cash, when the atm is empty, you will need cheques, especially as a cashless customer or employer. Who is saying this mess? And no you can't rely on some offline mechanism if your phone is dead or lost in a flood.

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