Money providers given digital B$ assessments

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

Numerous local money transmission and digital payments providers have been assessed as authorised financial institutions (AFIs) to handle digital Bahamian dollar transactions, it was revealed yesterday.

Central Bank of The Bahamas officials said Cash and Go; MoneyMaxx; SunCash; Omni Financial Group;, Kanoo; and Mobile Assist have all undergone their cyber security and other assessments as the roll-out of the digital dollar, known as the Sand Dollar, kicks into gear later this month.

Several commercial banks were scheduled to be added to the AFI list yesterday and, by the first week in November, the Central Bank will launch a second assessment phase for further providers.

Cleopatra Davis, head of the Central Bank's banking department, told a webinar: “A key component of the Central Bank’s vision is to promote a leading financial services industry with a modernised payments system.

"To this end, through the Sand Dollar, we are aiming to make the payment system more efficient. We also will attempt to achieve more financial inclusion and a more effective way of transacting in financial services as well as to provide greater access across the geographical layout of The Bahamas.

"Sand Dollar is also intended to provide a mechanism for non-discriminatory access to financial services, without regard to status, whether it’s residential, undocumented or Bahamian. Sand Dollar is also intended to strengthen our national defence against money laundering, illicit activities as well as counterfeiting."

Ms Davis said the Sand Dollar is a digital representation of the Bahamian dollar that will be transacted primarily using mobile phone technology. She said its use will attract little to no cost. "For person to person activities there is no cost associated with the use of Sand Dollar, while for businesses the cost should be minimal," she added. "It is also important to note that Sand Dollar will be non-interest bearing.”

Ms Davis said the Central Bank wants the Sand Dollar to be interchangeable with other digital wallets, and be linked into the payments system's real time gross settlement (RTGS) and Automated Clearing House (ACH). This will allow users to move Sand Dollar between their digital wallets and regular bank accounts, making it interchangeable with paper currency.

"The key motivation behind the introduction of Sand Dollar was to promote greater financial inclusion across The Bahamas,” Ms Davis said. "It is quite a challenge with banking in some of these islands.

"There are some that have access to a bank, or maybe one or two, but then it’s really spaced out in terms of access and getting to the bank, and there are some islands that literally do not have what we know as a traditional bank.”

Sametria McKinney, the Central Bank's chief information security officer, said: “The goal of the Central Bank is to offer a product that is as secure as possible, and for the general public to feel confident in its use. We are doing our due diligence to continuously provide a product that you feel safe when using, but we focus on four overarching principles.

"One is cyber security risk management, which is when we are accessing risk continuously. Also, application security and data protection security operations, and security resiliency. For you, the user, we have implemented multi-factor authentication, and this is at every layer of the ecosystem for wallets, and to protect the integrity of the data and information.

"We’ve included encryption to make sure that the information is secure and the integrity is sound, and lastly, the Central Bank has made sure to do a thorough assessment of all of its connectors and stakeholders," she added.

"We are working with our partners, our authorised financial institutions, to make sure that we assess not only our internal environment as the owners, but also to assess the integrity and the confidentiality and the availability of the infrastructure and application that will be used with those AFI’s (authorised financial institutions).

Kimwood Mott, the Central Bank's project manager for digital currency implementation, said the Sand Dollar should produce lower transaction costs and enhanced payroll management among its benefits. He added: “Merchant fees are associated with Sand Dollar, but are far less than the current merchant fees." Instant settlement of payments was another attraction.

Mr Mott said there are little to no fees attached to digital wallets, but this will depend on the provider Bahamians decide to use and their business model.

Bobby Chen, assistant Manager for e-solutions, added: “For peer to peer, it will be free. For personal wallet-to-wallet transactions, that subset is free.”