JAMAICA’S payment system accelerated its digital transformation in 2024, the central bank has reported, with retail credit card usage jumping 5.4 per cent and electronic payments surging 19 per cent.

However, the Bank of Jamaica (BOJ) warned in its Financial Stability Report 2024 that persistent “concentration risk” in large-value transfers remains a key concern, citing increased reliance on a few dominant institutions even as transaction volumes in core systems like JamClear-RTGS climbed nearly 12 per cent.

This digital acceleration manifested most visibly in retail payments, where credit cards cemented dominance as Jamaica’s preferred instrument. “Credit cards continued to be the most utilised retail payment instrument and accounted for 65.1 per cent of the total number of retail payment transactions,” the BOJ report stated. Their position strengthened through a 5.4 per cent expansion in circulation and a 3.4 per cent rise in average monthly spending to $190,500 per cardholder, driving outstanding receivables to $84.5 billion — a 16 per cent annual surge reflecting “greater engagement with electronic spending”.

Concurrently, traditional payment methods eroded further. “The value of cheques as a percentage of the total value of retail transactions continued to decline during 2024,” the BOJ noted, explicitly linking this to strategic efforts “to reduce dependence on cheques” and align with global efficiency trends.

Supporting this transition, commercial banks executed a visible infrastructure overhaul, directly enabling consumers’ preference for instant ‘tap-and-go’ payments over cash withdrawals. A “notable increase in the number of active POS terminals to 31,836 at end-2024, from 28,899 at end-2023” accompanied a 0.5 per cent reduction in automated banking machines (ABMs) — physically reconfiguring Jamaica’s payment landscape toward frictionless digital spending.

While the number of ABMs has since grown and now stands at over 900, the behavioural shift is becoming undeniable, with POS terminals now ubiquitous in stores, the data confirmed Jamaicans were actively choosing card swipes over ABM visits. “The ratio of POS transactions to ABM withdrawals increased to 1.68 at end-December 2024 from 1.08 at end-December 2023” — evidence of what the BOJ called “the ongoing transition toward electronic payment solutions aimed at reducing costs.” In simple terms, card payments became significantly more common than cash withdrawals in 2024. People were swiping/tapping their cards in stores almost 1.7 times more often than they were taking cash out of machines.

The digital transformation extended beyond traditional cards, with volumes of digital wallets and account-based transfers — classified as ‘other electronic payments’ — surging 19 per cent. The BOJ explicitly linked this diversification to strategic financial system goals, framing it as critical to building “a more inclusive and resilient financial system”. This growth was particularly driven by ‘increases in direct credit and debit transactions reflecting greater consumer and business reliance on automated payment solutions’ — signalling adoption by demographics historically underserved by card networks.

The boom in everyday digital payments — from credit card swipes to mobile wallet transactions — flooded into Jamaica’s core banking settlement systems. This was most evident in JamClear®-RTGS, which processes high-value transfers between banks. Transaction volumes surged 11.8 per cent to 4.3 million through JamClear®-RTGS — a direct result of heightened consumer and business reliance on digital payments. As the BOJ emphasised, “These results primarily reflected continued… reliance on automated payment solutions.”

Paradoxically, total values fell 1.4 per cent — a dip the BOJ attributed to positive efficiency gains, noting this aligned “with efforts to improve payment efficiency, thereby supporting financial system stability”. In practice, faster processing of smaller payments reduced systemic risk.

Similarly, the Automated Clearing House (ACH) — handling batch payments like salaries and bills — saw values rise 8.2 per cent to $1.47 trillion and volumes reach 16.5 million. The BOJ confirmed this growth supported its goal of “reducing net settlement risk by providing diversified payment options” — proving that retail payment trends aren’t just changing consumer habits but actively strengthening national financial resilience.

Despite these gains, underlying systemic vulnerabilities grew more pronounced. Highlighting this risk, the BOJ specifically warned that “concentration risk in large-value transfers remained a concern,” evidenced by a rise in the large-value transfer index (LSCRI). This concern was underscored by the increasing dominance of just two institutions, which now accounted for 37 per cent of payment activity—up from 36.4 per cent in 2023 — while smaller players held a marginal 2.5 per cent. Emphasising the critical need for vigilance, the central bank stressed that “the continued monitoring of systemically important financial institutions (SIFIs) remained crucial for stability”. This was particularly relevant as, despite liquidity concentration levels holding steady, the bulk of flows continued to move predominantly through “key institutions [retaining] a dominant role.”

Jamaica’s payment system improvements have yielded benefits like faster ABM recovery times — 2.6 hours in December 2024 versus 3.4 hours in January — and lower processing costs, the BOJ said. However, the central bank explicitly highlighted concentration risks as a key concern, signalling that digital progress requires careful oversight. While a 19 per cent surge in electronic payments is “further reinforcing the shift towards a more inclusive and resilient financial system”, the BOJ stressed that resilience depends on addressing the heavy reliance on two institutions, which handle 37 cents of every large-value payment.

The Bank of Jamaica notes a jump in digital payment adoption in 2024.