• Want PR effort to counter ‘fear of change’

• And ‘minimise negative public feedback’

• Tender removed following Tribune query

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Central Bank yesterday removed from its website a document seeking bids for a campaign “to mute” opposition to the elimination of cheques after the language used was questioned by Tribune Business.

The tender, which sought proposals for a public relations and education campaign over plans to cease using cheques as a payment means by end-2024, revealed that the regulator as well as the Clearing Banks Association (CBA) and wider financial services industry want to minimise “negative public feedback” to the proposal.

The Central Bank said “anecdotal” feedback suggested some Bahamians are opposed to this drive, “whether out of nostalgia, fear of change or unfamiliarity with evolving payment technologies”, and greater public education was needed to counter this.

However, this newspaper pointed out that the phrase “the parties concerned seek to mute these objections” could be interpreted by some as an effort to muzzle, or stifle, dissenting voices to the elimination of cheques as a means of settling financial transactions.

This was denied by John Rolle, the Central Bank’s governor, in an e-mail exchange with Tribune Business although he said the tender document’s wording would be reviewed. “We will look at the document again. Mute is not to suppress. It is to actively respond to the queries being raised,” he wrote in response. Subsequently, the tender document was removed from its original position on the Central Bank’s website and could not be relocated before press deadline last night.

Setting out the tender’s purpose, the bid document said: “The Central Bank, along with the Clearing Banks Association and ‘supervised financial institutions (SFIs) operating in The Bahamas, invites proposals from qualified firms to engage in the design and execution of a public education and public relations media campaign for the elimination of the use of cheques as negotiable instruments for the acquisition of goods and services, and settlement of legal and financial obligations, in The Bahamas.”

Noting that this effort will involve “content and distribution channels from both public and private sector stakeholders”, the Central Bank reiterated that itself and the banking industry “have agreed to cease the use of cheques as negotiable instruments on December 31, 2024”.

“The parties concerned wish to move ahead with the elimination of this instrument in an effort to improve the efficiency and effectiveness of the domestic payments sector, and to respond to the technological advancement of other payment instruments,” the bid document added.

“However, initial anecdotal feedback has indicated a preference by some stakeholders for the retention of the instrument, whether out of nostalgia, fear of change or unfamiliarity with evolving payment technologies. The parties concerned seek to mute these objections and implement a strategy that would facilitate the cheque elimination project with minimal negative public feedback.

“The objective is to develop and implement an effective public education and public relations strategy to allow the parties concerned to move forward with the cheque elimination plan, in designated phases, reflecting infrastructural development, and culminating with the final December 31, 2024, ‘drop dead’ date,” it continued.

“The successful respondent must be able to propose a national media campaign designed to effectively reach the entire population of The Bahamas. To be considered, firms must demonstrate a clear understanding of The Bahamas’ domestic financial services payment circumstances. They must also have an established track record in developing communications on complex subject matter in ways that are clear, accessible and actionable for lay audiences.”

Companies were asked to indicate whether they plan to bid by July 31, with full proposals to be completed and submitted by August 22. The Central Bank, together with commercial banks and the wider financial services industry, view the elimination of cheques as another key step in the evolution of digital payments channels and efforts to drive ever-increasing numbers of Bahamians to use them.

Their contention is that digital and online banking channels are more convenient, cheaper and easier for consumers to use, eliminating the time spent queuing physically at banks. In addition, eliminating cheques, as well as significantly reducing the use of cash, will enhance consumer security and create greater certainty that payment transactions will be settled - especially given the susceptibility of cheques to ‘bounce’ or be exploited by fraudsters and scammers.

However, even though the volume of cheque use has declined by around 50 percent over the five years since 2017, some 1.2m payments - involving a collective $4.2bn sum - were made by this method in 2021 according to the Central Bank’s own annual report.

“Over the review period, cheque usage remained subdued, with the exception of large-value transactions. More specifically, the number of processed cheques declined by 7.6 percent to 1.2m, while the attendant value fell by 6.8 percent to $4.2bn, year-on-year,” the report said.

This represents a steep drop from the near-2.5m cheques written in 2017 and 2018, and the estimated 2.3m passed in 2019, with the big drop-off occurring in 2020 amid the COVID-19 pandemic’s lockdowns and other restrictions which forced Bahamian businesses and consumers to digital banking channels. The number of cheques written in 2020 fell by 35 percent year-over-year to between 1.3m-1.4m, and that decline - albeit at a lower rate - continued in 2021.

The Central Bank, in unveiling its plans to eliminate cheques at end-2021, said: “At the aggregate level, commercial banks revealed that during 2016-2019 the total number of cheques presented for payment fell by an average rate of 1.3 percent annually to 3.5m transactions, albeit the corresponding value grew by an annual average of 4.7 percent to $16.7bn as cheques remained a preferred method for some larger-value payments.....

“In 2020, the Central Bank surveyed both businesses and consumers to ascertain the pattern of use of payments instruments and the outlook that respondents maintained concerning their likely future pattern of transactions. The surveys revealed that between 20 percent to 30 percent of consumers still used cash for all bill payments.

“For all categories of payments, however, the average frequency of cheque usage was significantly lower than for transactions through electronic (online) banking channels and use of credit and debit cards. Meanwhile, mobile wallet products were documented to be at a very early stage of adoption,” it added.

“There was also evidently a greater shift away from cash and cheques during the pandemic. Further, more than a majority of surveyed persons expected to use less cash in the future. Where hesitance still existed around acceptance of digital delivery channels, members of the public expressed concerns around cyber security, fraud and the ease of use.”