• Bahamas below industry’s 40% adoption expectation

• Provider: ‘Why not do at home what you do travelling’

• Govt’s frequent Sand Dollar use to be ‘game changer’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamian use of digital payments is “not as robust as we’d like to see” yet, one provider asserted yesterday, even though the volume of transactions it processed increased by 30 percent in 2022.

Jeffrey Beckles, Island Pay’s managing director, told Tribune Business that an estimated 26 percent of consumers and merchants are regularly using the technology for financial transactions compared to industry expectations that 40 percent would have fully “embraced” it by now.

Although adoption rates are “getting better”, he argued that both the Government and industry need to close the public education “gap” on digital payments, and Bahamians bring the ease with which they conduct electronic transactions while travelling abroad back home.

Describing digital payments as “a revolution that is here to stay”, and “something to be embraced and not feared”, Mr Beckles told this newspaper that adoption would receive a significant boost if the Government starts to pay for good and services using the Sand Dollar.

This, he argued, would foster business and consumer confidence in the Central Bank-backed digital currency, with the Island Pay chief also voicing optimism that increased use of electronic transactions will position Bahamians and the country’s economy to “thrive” in an increasingly globalised environment.

“It’s evolving at a steady pace, albeit not at the rate we would want, but it’s steady. It’s getting better,” Mr Beckles replied, when asked about the pace of digital payments adoption in The Bahamas. “It’s doing better than it was, but is not as robust as we’d like to see it. But we’re making steady progress.....

“Given how sophisticated the Bahamian consumer is, and how savvy merchants are, we would have thought that by now from a national perspective we would have seen at least 40 percent of consumers and merchants embracing it.”

The Island Pay chief said the provider currently has 30,000 clients with electronic wallets, and 58,000 total users “on the domestic side” in The Bahamas. “On the foreign visitor side, the Sand Dollar tourist wallet is picking up again since we launched it in November last year,” Mr Beckles said of an initiative designed to encourage visitors to pay local tourism and services providers via the digital currency.

“We’ve now seen 2,600 downloads of the tourist wallet. It means they’re getting access to Sand Dollars and spending it right here. That’s a game changer. If we can grow that to where we can see millions of tourists using Sand Dollars in The Bahamas and Sand Dollar wallets, imagine the effect that will have on the Family Islands.”

Asked how current digital payment adoption rates measure up against the industry’s 40 percent expectation, Mr Beckles said: “In a country where it is 97 percent cash-centric, I would say about 30 percent.... Remember we have a small economy here in terms of people. That number should be well above 40 percent. And thirty percent is stretching it. Twenty-six percent would be accurate. We are going to keep pressing against that target.”

Mr Beckles said the digital payments embrace would be aided if Bahamians bring the behaviour they learn on foreign trips home with them. “When you consider we have a working population of 220,000-230,000, it would be reasonable that most consumers begin to use digital tools in The Bahamas,” he added.

“Many of those same 220,000 who are working use digital payment mechanisms in the jurisdictions where they travel. We are more savvy and sophisticated than we behave. We’d like to see Bahamians do exactly the same thing as they practice abroad. If they use Google Pay or Apple Pay when they travel, they should the same transactions at home.

“The environments they are travelling in are predominantly cashless with increasing digital payments. Why not do it at home? You do it when you travel.” Mr Beckles added that the effort will benefit from plans to accelerate the Sand Dollar’s roll-out in the coming months, coupled with greater Central Bank and private sector focus on educating consumers and businesses about the merits of using the Bahamian digital dollar to settle payment transactions.

While usage has been below provider expectations, it continues to grow. “We saw a 30 percent increase in digital transactions processing in 2022,” Mr Beckles said of Island Pay. “Numerically I can’t say what that number is, but there was a 30 percent increase in transactions year-over-year.

“We see that as a good gateway into a very strong 2023 keeping in mind that we’re under a commitment in 2025 with regard to the amount of cash in circulation.” Asked whether he was referring to the Central Bank’s plans to eliminate the use of physical cheques by end-2024, he replied: “Most entities by the mid to end of this year will be done with it.

“Based on what we’re seeing, the message is: ‘Don’t wait until the last minute. Do what you have to now’. What we’re seeing is that more payment options are becoming available, so merchants believe they can get it done. Not only do we believe that the Sand Dollar is a good solution for the unbanked, under-banked and financial inclusion, digital payments allow everyone.....

“It doesn’t matter your income level. It allows everyone access to these tools. It means that the more people with digital tools in their hands, the greater the adoption. It’s just the fact that, at the end of the day, consumers and merchants reals the process of digital payments is cheaper than traditional means. It’s a revolution that is here to stay. It’s not something to fear; it’s something to be embraced.”

Mr Beckles said digital payment adoption rates will enjoy a major boost “when more and more mainstream merchants begin to adopt the Sand Dollar, and when the Government starts to consistently use its own digital currency for payments”. High consumer traffic areas, such as malls and the airport, as well as fast food restaurants and hardware store, were all identified as having a role to play.

“I think the other thing that has to drive that is the Government,” the Island Pay chief added. “They’ve created a digital version of the fiat, and a tremendous expression of confidence in the Sand Dollar is when the Government starts to use it. Nothing beats confidence if you own it and use it, and tell the Bahamian community that you are paying your contractors and contracts for services in Sand Dollars.

“I can tell you that people will be running to get the Sand Dollar. Imagine if employers paid people in Sand Dollars. It’s cheaper and more efficient in so many ways. We can do it. That’s what we call a real game changer.”

Mr Beckles said Island Pay will “continue to drive” its merchant services and tourist Sand Dollar wallet in 2023, adding: “We’re going to put a lot of energy into that.” As for digital payments overall, he told this newspaper: “It is the way of the future for The Bahamas. There is no doubt about that. We have every confidence that it will be.

“We’re excited about it. There are real opportunities to advance The Bahamas. Keep in mind the reason we’re doing this is because The Bahamas will be better positioned, Bahamians will be better positioned, to thrive in a global economy. That’s what we’re aiming for.”