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Minister Straughn says payment system will be less time-consuming for all

by Emmanuel Joseph
6 min read
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An upgraded real-time system of making payments to individuals, businesses and Government, which will phase out the use of cheques, is now in operation in Barbados.

And the Barbados Bankers Association (BBA) has welcomed it as a step in the right direction.

Minister in the Ministry of Finance and Economic Affairs Ryan Straughn said that for an extended period, financial institutions across the island had been testing the system, referred to as the Automated Clearing House (ACH), which went into operation on Monday.

Addressing the Barbados Labour Party’s (BLP) St Michael West Central branch meeting on Sunday night, he said the system will improve the ease of doing business and has the potential to replace the “time-consuming” process of conducting financial transactions by cheque.

“We are scheduled to launch [Monday] and, therefore, in the coming weeks and months you start to see that ‘oh, I could take up my phone and pay whoever, transfer some money to whoever, they confirm that they get it….rather than having to run to the ATM’,” he said.

“You can get up, you can pay government anytime – and I will be happy for you to pay us anytime – because it will be real time. Order anything and have it delivered to you rather than you having to get up and stand up in a line to pay for it.”

Straughn added: “There might be a few places that will have to take cash for the foreseeable future, but let us try as much as possible for our own sakes to be able to make this work.”

He said the system will also improve the country’s growth prospects.

“….Because it means business can be done faster. It means you don’t have to worry whether somebody writes you a cheque and doesn’t have enough money [on their account] and have to be running about behind them…,” he said.

“….It reduces the risk to the business. Also, if you deal with a lot of cash these days, it is a security risk. Managing cash ain’t easy so rather than having to be looking over your shoulder to see if anybody is watching you, if you invest in those systems that would now become an added security feature that allows you to do business.”

The ACH is part of a wider upgrade of the local payments system. It allows customers to carry out banking transactions in real time even outside regular business hours and financial institutions to use a digital representation of a cheque to clear so transfers take place more quickly.

Minister Straughn urged consumers and business owners to get on board with the new payment system to bring Barbados into the 21st century, as he lamented that too much time and money were being wasted by people having to wait in line to make payments.

“Every time I see a line, it is time, it is money, it means you are not doing what you are supposed to be doing because there are better things that you could be doing to help the economy to grow. So, if we can get on board with that, that could take out at least one per cent of wasted time in terms of GDP [Gross Domestic Product] for people just running around doing things…and just the efficiency of businesses being able to deliver to you,” he asserted.

Straughn said that in the same way Barbadians trusted online shopping portals like Amazon as well as Netflix for movies on demand, they should trust the local real-time digital platform.

“Just like when you tell Amazon to send to your uncle or aunt in New York or wherever it is that you are sending stuff to, that is where the Barbados economy now needs to get to…. Our businesses equally have to step up their game in order to provide that level of service to you. So growth will depend on the way we do things in the country,” he added.

Minister Straughn assured Barbadians that the new measure had been tested by financial institutions for close to two years and he was confident it would work.

“The financial institutions have gone through all of it for the last 18 months, just trying to get everything right to make sure that if I am sending to you at X bank from Y bank or credit union that you will get it…you will get it instantaneously. And, therefore, that is part of the very soft digital revolution which is going to make a significant difference to the lives of ordinary Barbadians,” he said, urging Barbadians to change their mindset to achieve greater efficiency in doing business, particularly in the financial services sector.

Welcoming the digital processing system, the commercial banking sector said it would allow people to abandon the use of cheques.

“This is what you call a real-time process we are forming. When customers make payments using the banks’ various payments processing…internet banking, mobile banking…the payments made to the other bank would be more or less instantaneously,” BBA president Anthony Clerk said in an interview with Barbados TODAY.

“It would speed up the transfer of funds. Right now, . . .  if you make a payment using it from a bank to another bank, it doesn’t happen instantaneously, it would take probably overnight. So, this is an instantaneous payment, so it is more efficient and effective. This type of system creates the ability for the bank to move away from cheques,” he added.

Clerk said that customers would not have to wait for up to three days for cheques to clear.

“If you use the different payment portals, it is an instant payment. Banks can now hopefully start to move customers away from things like cheques and even the use of cash. So, that’s the intention,” the bankers’ representative added.

emmanueljoseph@barbadostoday.bb

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