Developments in Barbados’ Payment System

The domestic payments landscape is undergoing change. In February 2021, the Barbados National Payment System Bill was passed in Parliament. This Act allows for more effective oversight and regulation of the payments system and its operators through the provision for licensing payment system participants and the establishment of a clear set of rules. It is hoped that the new framework will boost innovation in the payments space by encouraging the increased use of various forms of electronic payments in Barbados.

Under the Act, the Central Bank is tasked with the responsibility for oversight, regulation and development of the Barbados payment system, to ensure robust activity while maintaining financial stability. To aid in this role, a broad-based National Payment System Council will provide advice to the Central Bank.

In the financial market, deposit-taking institutions are in the process of changing over from the domestic CarIFS network to the international VISA or MasterCard networks for their debit cards services. This shift is intended to provide a more secure platform for card transactions through the adoption of chip and pin cards, and is expected to support the growth of online transactions. The transition will raise the cost of some services provided by financial institutions, and the Bank has been evaluating options for regulatory intervention to minimise the impact on users of financial services.

Work continues on the upgrade of the ACH system to accommodate real time payments for direct debits. This framework creates the potential for financial institutions to offer alternative payments options, including through increased use of mobile transactions. Credit unions are also preparing to participate on the upgraded platform. The roll-out is expected to be phased, beginning in the last quarter of 2021.  To facilitate reduced clearing times for cheques, reforms to the cheque clearing process are also expected to come on-stream later in the year.  These changes will replace the presentation of physical cheques with cheque images in the clearing process. It is anticipated that this will reduce the time it takes to clear cheques and allow customers to have faster access to funds received via this method of payment.

Government is continuing its policy shift towards electronic payments. During 2020, Government’s EZPay+ payments platform allowed individuals to pay their land tax or make NIS contributions using online payment options. Payments for driver’s licences commenced during third quarter of 2021, while payment provision for other services is on the horizon.

Adapted from the 2020 Financial Stability Report.