THE Bank of Jamaica (BOJ) says if a single Caribbean settlement network for payments, as proposed by WiPay Caribbean, a fintech company, is to work, it will require a Caricom level arrangement for a regional system to regulate and facilitate such a region-wide mobile wallet transfer and settlement system.

The BOJ stated that it is at this point, it is neutral on the prospects of a Caribbean mobile wallet network as not enough information has been gathered on the model to be utilised.

“Jamaica is an open economy with a fully liberalised foreign exchange market, as such, the country does not experience issues with cross-border payments. An ongoing issue for cross-border payments is that of high fees associated with these transactions due to the complex nature of processing these payments and at times compliance costs related to anti-money laundering (AML),” the BOJ stated.

It added that as things stand, there is currently no regulatory framework in place for a regional settlement system involving mobile wallets.

“This would involve collaboration and agreement across the countries to be involved.

It stated, “A regional settlement system refers to regional integration, a matter that has been discussed at varying levels in each Caribbean country.” It pointed to the view of the guidelines for regional integration developed by the World Bank which highlights the requirements for regional integration.

The BOJ was responding when asked for comment on the private network proposed by WiPay which is intended to encourage users of several different mobile wallets in a number of countries in the region to transfer funds to each other and pay for items sold online using a single Caribbean settlement network.

The single settlement network is being facilitated by Trinidad-based payment facilitation services firm WiPay Caribbean, through a memorandum of understanding (MOU) dubbed the Treaty of Bridgetown.

Chief executive officer of WiPay Caribbean Aldwin Wayne, who has also created Colour Bank, the Caribbean’s first neo (digital) bank based in Miami, launched this and another two solutions on October 14.

They are the new Volt Network, the Colour Bank app and the Caribbean’s first tokenised credit card.

The Volt network, the entrepreneur promises, proposes to connect over 50,000 websites and point-of-sale terminals across the Caribbean and process individual, government and corporation transactions.

The privately owned network, Wayne stated, has created a unified settlement network for the Caribbean.

He said at the launch in Kingston, Jamaica in mid-October, “This solves one of the greatest financial problems in the Caribbean: cross-border settlement. Each Caribbean country has its own currency that trades primarily with the US dollar. By pegging a digital token to the US dollar, transactions from one country to another can maintain the expected value, because local currencies maintain their value against the US currency.”

The digital token, which exists on the Volt network, will facilitate inter-island transactions without the need for correspondent banking. It was explained that the Volt Network, through its partnership with WiPay, will replace WiPay’s Digital Fiat Solutions, which is used by several governments and private-sector entities across the Caribbean.

The BOJ was asked if its own BOJ’s digital wallet might be considered for the Caribbean mobile wallet network proposed. The BOJ responded: “There are wallet providers, which are regulated or authorised by BOJ, operating in Jamaica that are eligible to offer digital wallets to their customers. Currently, NCB and its subsidiary TFOB has developed a digital wallet, Lynk, to offer payment services to their customers including Jam-Dex.

It added, “Jam-Dex, Jamaica’s digital currency, which is legal tender, is for domestic use only. It is a substitute for the Jamaica dollar, cash.”

The BOJ said that currently, digital wallets operating in Jamaica must have the capability for interoperability across existing digital wallets.

In conclusion, the central bank stated, “In this regard, there is no consideration for a Caribbean mobile wallet network, this as the BOJ continues to do work on the broader issue of regional integration which goes beyond integrating only mobile wallets.”

WiPay indicates that it recently expanded into Ghana, Cayman Islands and is also launching WiPay Columbia soon. It was said that the new Colour Bank app will become available in December 2022.