Barbados’ Payments System Must Change to Match the Digital Era

The national shutdowns and concerns about contracting COVID have led many Barbadians, including those who were previously hesitant, to turn to e-commerce and e-banking. Central Bank of Barbados Governor Cleviston Haynes hopes this new approach to conducting transactions will continue.

According to Haynes, “e-commerce is not a temporary measure, a stopgap until things return to “normal”. This is the path for doing business in the future…. The increased use of digital payment methods represents the trend of the future financial architecture evolving in the Caribbean and across the globe.”

Against the backdrop of both his organisation and Government advocating for the reduced use of cash and the elimination of cheques, the Central Bank Governor announced that Government has introduced new payments legislation. This new legislation is necessary, he said, to ensure that this shift does not compromise financial stability:

“It is therefore necessary for us to ensure that there is a robust framework for the effective and secure operation of the national payments system capable of the smooth execution of both domestic and cross-border transactions. This is critical because if the payments and settlement system is impaired, economic activity may grind to a halt, with individuals and businesses experiencing difficulties, including the payment of salaries, pension payments and other transfers, which they need to pay their bills, loan payments, insurance premiums and purchase food and medicine needed to sustain their lives.”

Haynes revealed that the Central Bank will have oversight for the system, and that a Payments Council will be established to function as an advisory body. He confirmed that the Bank will issue guidance and set regulations for financial institutions, and will be “prepared to take action against licensees that breach the law.” Consumer complaints, however, will be managed by a to be established Financial Services Tribunal.

The new legislation will be accompanied by a public education programme to ensure that both customers and financial institutions understand both their rights and obligations. “We believe that this will be crucial to gaining buy-in from all stakeholders as we promote increased competition in the payments system.”