Card swipe payment option again on the table

Almost a year after floating the idea of introducing a new electronic payment system to make it more affordable and easier for small businesses to collect payments, officials are back at it again.

However, one major concern emerging from a meeting on Tuesday was whether the local banking system would readily jump on board to be the facilitator.

Representatives from the world’s largest financial services company, MasterCard Inc., met with a range of small business operators on Tuesday at the Lloyd Erskine Sandiford Centre where they spoke about the plans for the introduction of the mobile merchant machine, which was first touted in March 2019.

The payment system would form part of MasterCard’s new Smart Island programme, which is designed to help boost the region’s earnings from tourism, and help with faster recovery for the region following a natural disaster.

The solution, which will be linked to the smartphone of the merchant, was introduced in the Bahamas last month and officials are seeking to roll it out across the region.

Michelle Alvarez, Manager for the English-speaking Caribbean in the Market Development Division, warned small business operators of the need for Barbados and the rest of the region to keep abreast with new transaction methods.

“One of the main reasons we are here is to make sure that you are on board with us because if you are not in you are going to be left behind,” said Alvarez.

She said the mobile point of sale (POS) system should make businesses more resilient and recover quickly after a natural disaster.

“If you are not accepting digital payment and you do not have that credit history it is going to be very hard for you to go back to a bank and ask for a loan to get the business on its feet,” she said, while pointing to difficulties small businesses had in Puerto Rico following Hurricane Maria in 2017.

However, for the new mobile machines to be introduced in Barbados, it will depend heavily on the facilitation of the financial institutions.

Some of the main concerns of the small business operators were the fees associated with the current POS systems, the bureaucracy associated with setting up a business account in order to get the system, and the inability to use some of the devices in another country.

MasterCard officials gave the concerned SME operators the assurance that they would be meeting with the representatives from the commercial banks, credit unions and the Central Bank this week to convey their concerns and seek the best possible deal.

MasterCard would provide the POS terminal, allowing payments to be captured by the small business operators by swiping, tapping or inserting the debit, credit or prepaid card of the customer.

Referring to the new payment system as “a bank in the box solution”, Alvarez said: “it creates an opportunity for you to grow your business, feel secure when you are making the transactions and have a secure way to handle your finances.”

Representatives of the firms were also assured that they would not be required to open a business account, but they would be given a card that can be linked to their existing account so they could access funds.

“You don’t need to have a [business] account. We will give you the card with the bank . . .

“We are still analyzing which bank will be the partner and then we will offer this to you via the bank,” said Alvarez.

Officials were unable to say when the programme would be introduced here, but said it depended on the buy-in from both the merchants and the financial institution.

However, while indicating that they were sold, the merchants quickly pointed out that commercial banks already had POS systems in place and may not readily warm up to the idea, adding that they would prefer the credit union.

MasterCard explained that there would be a fixed fee for the card reader, card reader maintenance and for annual membership. The variable cost will be transaction fee, which is yet to be determined.

“This is the first phase. What we are doing right now is gathering all of your inputs, concerns and what you would like to see, and then we can strategize and deploy it here in Barbados,” said Alvarez.

While the micro, small and medium enterprises sector plays a critical role in the revenue gains from tourism, it is estimated that only a tiny portion of firms accept electronic payments.

President of the Barbados Association of Retailers, Vendors and Entrepreneurs (BARVEN) Allister Alexander welcomed the idea, saying it could serve as a mechanism to get a better idea of the contribution of the informal sector here and to ensure greater financial inclusion.

“This is a great opportunity to capture as many people as possible. This is a great opportunity now to even capture our sector. We are looking forward very much to this initiative,” said Alexander.
marlonmadden@barbadostoday.bb