After two decades of linking the nation’s commercial banks, there are indications that they may soon withdraw from the banking machine interconnection system known as CarIFS, Barbados TODAY has learned.
Sources said the banks may seek to engage a similar service out of North America instead, should a plan to upgrade the current system, run by the locally-based Caribbean Integrated Financial Services (CarIFS) system, not work to their satisfaction.
It is not clear how soon the upgrade would likely take place.
When Barbados TODAY reached out to officials of CarIFS, they declined to comment on the development, indicating that they would prefer the banks to do so instead.
Barbados TODAY investigations revealed that commercial banks have been busy trying to wrap their minds around how best the current system could be upgraded without them incurring too much cost.
At the same time, at least three credit unions – the Barbados Workers’ Union Co-operative Credit Union Ltd, the City of Bridgetown Co-operative Credit Union Ltd and the Barbados Public Workers’ Co-operative Credit Union Ltd – have CarIFS-ready cards, meaning that their members are able to use the CarIFS network for automated banking machine (ABM) services and point-of-sale transactions.
But should the commercial banks decide to engage a new network provider, the ability of credit union members to access cash and make purchases would become limited, Barbados TODAY was told.
CarIFS is an Automatic Banking Machine network provider, which allows customers of financial institutions here to have 24-hour access to cash from their bank or credit union accounts and make point-of-sale transactions with merchants.
President of the Barbados Bankers’ Association (BBA) Donna Wellington would not go into details regarding the planned modernization that banks required of the system.
Neither would she confirm nor deny that some banks would be seeking to use a new system should the upgrade not be to their satisfaction.
But Wellington told Barbados TODAY the association was in discussions “as to what is the best way to deliver the services CarIFS provides”, while noting that the BBA was not in a position to say what the end result would be.
“We are working with CarIFS to ensure that it is upgraded and this work continues. At this stage we are not in a position to discuss the end state,” said Wellington.
But she stressed that whatever decision was taken in the end would be to the benefit of the country.
“This is a work in progress; however, given our drive toward a digital, connected and integrated financial payments we will not make any decisions that will do anything but improve the facilitation of cash management services for the country at large,” said Wellington, who indicated that anything other than that “would be to our detriment and counter-intuitive”.
Barbados TODAY understands that the credit unions have been expressing concern, arguing that should the banks decide on a new network provider, they would be left out in the cold and would have to quickly come up with a plan.
Credit union officials have recently been meeting with Government in an attempt to have their concerns addressed, sources told Barbados TODAY.
Describing the development as one of “flux” right now, one source indicated that the upgrade of the technology could prove to be too expensive and that could result in the banks employing a new network provider.
One source pointed out that while the current system had worked “quite well” over the years it was now “old technology”.
“As you know, whenever you try to upgrade technology there is often a lot of cost and people are thinking ‘should they spend this money on this new technology for this system or are we moving to a new kind of technological platform anyway, in which case we don’t need this system’,” said the source.
Government is said to be keeping a close eye on the development in an effort to ensure that the outcome would be beneficial to consumers and there would be very little or no disruption.
One member of the credit union movement told Barbados TODAY that should the banks choose a new network provider it would “definitely impact credit unions negatively”.
“Our cards would not be able to work on another bank or ATM or point-of-sale unit and so our members’ ability to access cash would be limited unless we come up with a solution that would allow us to access funds across the system. We don’t have a specific timeframe to work with but we know it is something, once announced, we have to get some alternative solution quickly,” said that credit union source.
Efforts to reach officials of the Barbados Co-operative & Credit Union League to find out what plans were being put in place were unsuccessful up to news-time.