President of the Small Business Association (SBA) Wayne Willock is calling on Government to mandate that all local debit transactions must be facilitated by local entities, in light of reports that commercial banks are seeking cheaper alternatives to Caribbean Integrated Financial Services Inc. (CarIFS).
Delivering the featured address at the Cave Shepherd Card Services Digital Payment Workshop at the Savannah Hotel this morning, Willock pointed out that such a move would result in higher user fees for Barbadians and given the fact that the country is going through a period of austerity, Government would be well advised to regulate the process now.
“Cardholders fees might increase and of course a non-competitive monopoly might be created. I would like to call on any Government agency responsible for such, to mandate that all local transactions or a high percentage of debit transactions must remain local since we are in a period of retrenchment,” he said.
The SBA head further suggested that the move may be closer than some may think and it would result in the sidelining of credit unions and their partners.
“This would lead to the marginalization of our credit unions who also depend on CarIFS and with whom the SBA and its members currently have active partnerships. These credit unions would then be forced to adopt either a Visa or Mastercard product, since without CarIFs there would be no alternative,” he argued.
Willock also issued a similar caution to the Fair Trading Commission, noting that they too should consider the cost of such a move.
“The Fair Trading Commission should consider the impact of banks making this move which would certainly result in a monopoly. I am just throwing out some thoughts so that we can nip this in the bud, in case such a movement starts creeping into our system,” he said noting that in light of these possibilities, platforms such as the Cave Shepherd App were important.
Last November Barbados TODAY reported that banks may seek to engage a similar service out of North America, should a plan to upgrade the current system, run by the locally-based CarIFS system, not work to their satisfaction.
It is not clear how soon the upgrade would likely take place.
Officials of CarIFS 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.