Central Bank’s payment system wins consumer body’s support

A proposal by the Central Bank of Barbados to centralise the commercial banking payment system has received support from a consumer group.

The Barbados Consumer Empowerment Network (BCEN) welcomed the initiative, saying it will benefit consumers. 

“We appreciate Governor [Dr Kevin] Greenidge’s efforts to address the inefficiencies and fragmentation currently plaguing our banking sector,” said Maureen Holder, BCEN’s Executive Director. “This move towards a more streamlined and integrated system should bring about significant benefits to consumers and businesses alike.”

Holder noted that the current fragmented system, where individual banks operate independently without sufficient interoperability, often leads to delays and higher transaction costs. However, by centralising the payment system “there is likely to be reduction in some of these inefficiencies, leading to faster, more reliable transactions and a more user-friendly banking experience,” she said.

A key issue highlighted by the consumer advocate was the high banking fees that have been “a major source of headache for consumers”. 

Holder contended that for “quite some time”, Barbadians have complained about “the varied and egregious practices with the application of fees within the current banking system”.

She argued that there is hardly any disparity in banking fees across banks in Barbados, making it “very difficult for consumers to choose from amongst the banks”. 

The “uncompetitive nature of banking fees has long been a source of frustration for consumers”, Holder said, adding that a centralised system could “foster a more competitive environment, potentially driving down costs and making banking services more accessible and affordable for all Barbadians”.

Another critical point was the challenge many citizens face in opening bank accounts and accessing banking services, an issue recently discussed by CARICOM central bank governors.

Holder said her organisation has been talking with the Bankers Association of Barbados about this issue since 2022. 

“We are encouraged by any commitments made to implement strategies and reforms aimed at improving access to banking services,” she said, emphasising the importance of enhanced financial inclusion.

The BCEN spokesperson welcomed the Central Bank’s focus on improving financial systems, fostering innovation and ensuring stability for consumers. She also noted the positive step of regional cooperation, including engagement with the Inter-American Development Bank and the formation of a regional central bank committee on statistics, which “can lead to more resilient and efficient financial systems across the Caribbean, benefiting all member states”.

Holder said BCEN remains “fully committed to any endeavour that builds a transparent, accessible, reliable financial system which works for everyone, fostering economic prosperity and empowerment for all Barbadians”. (EJ)