Cash is still the main way transactions are settled in Barbados, says the Central Bank of Barbados Governor Cleviston Haynes, even as he backs greater use of credit and debit cards and digital payment systems.
The Central Bank is in support of Government’s own efforts to reduce its cash and cheque use and ramp up alternative transaction methods, he said, though warning against a sudden abandonment of cash.
“A decade or so since the bank hosted its first currency exhibition, we have seen the increased use in credit and debit cards, a significant reduction in the use of cheques and more recently the introduction of digital and cryptocurrencies.
“So we acknowledge and encourage the changes to the payments landscape. At the same time, it would be premature to write cash’s obituary.
“In the future as we seek to increase efficiency through the use of electronic payments, cash may no longer be the king, but will remain in the mix.”
The Governor was addressing the opening of the Window to the World currency exhibition at the Exchange Interactive Centre today, where a number of school children and individuals had the opportunity to view and learn more about currencies from over 85 countries and territories.
Haynes said: “For some, the assertion that cash is king has been replaced by the question is cash dead or dying? In many ways this is not surprising. Alternatives to cash are increasingly popular – credit cards, debit cards, mobile wallets – appear to be displacing traditional payment instruments such as cheques and cash.
“We do recognize that already there is an increase in usage of credit and debit cards and transactions through an automated clearing house or ACH. So while cash remains relevant now, it is facing increased competition as an instrument for payments. We do believe, however, that there will remain a place for cash.”
The Governor said the Central Bank understands the need to adapt to the requirements of the new digital age and the transformation of the local economy, adding that alternatives to using cash had the potential to make payments more efficiently and to enhance productivity and overall competitiveness.
Government has taken a decision to cut back on issuing cheques as it embraces more digital payments.
Haynes said: “We are committed to working with Government to improve the payments of its structure including through the reduced use of cheques and cash. We believe this will contribute to speedier and more secure settlement of transactions.”
But while the aim is to reduce the use of cash, it currently accounts for the vast majority of transactions carried out here.
Barbados has just over $670 million in circulation – about seven per cent of the island’s Gross Domestic Product.
But the Governor warned that any wholesale shift to digital payments or even debit and credit cards could have negative implications for the unbanked, the elderly and “other vulnerable members of society” while removing that level of privacy for some.
Pointing to the importance of maintaining “some level of cash” in the system, Haynes also noted that cash serves as a back-up should the network that powers other forms of payment go down due to glitches, security breaches or a natural disasters.
Central Bank Deputy Director of Currency Octavia Gibson said cash remained one way of countries showcasing various segments of their history, culture and people.
She encouraged the students present to take the time to learn more about the various currencies, adding that they were a good way of learning something about a country.
“Our hope is that as you take in this exhibition you will discover that banknotes on display do indeed offer a window to the world,” said Gibson.
She said she was satisfied with the level of interest from the school children in the currency exhibition, adding that they were eager to learn about the materials that monies were made of and how much they were valued against other currencies.
The exhibition will run until Sunday from 10 a.m. to 6 p.m. at the Exchange Centre, located next to the Central Bank in the Tom Adams Financial Centre on Spry Street, The City.