BRIDGETOWN, Barbados (CMC) – Senior financial sector specialist at the World Bank, Nicholas Smith, said Tuesday Caribbean countries are lacking in the implementation of fast payment mechanisms that have proven to be a major breakthrough in business transactions globally.

“Fast payments, as they are also known, are everywhere now…roughly in 120 countries,  but in the  Caribbean we are not there yet,” Smith said at the launch of the Central Bank of Barbados (CBB) national instant payment system (IPS), named “BimPay”.

He said there are a couple of jurisdictions that have some form of the payment system, “and why this matters is just not to keep up with the Joneses…because not having the system makes life more difficult.”

“Think about everybody’s life, your grandma, the taxis, sending money to your family. It’s a bit inconvenience, and so it is great to see that the Caribbean is starting to take the thing in, and actually Barbados is at the forefront of these reforms,” he said.

“We are encouraged to see that because there are so many benefits that we are seeing. Look at what’s happening in Brazil, Paraguay is doing a lot, El Salvador has done a lot, Costa Rica has done a lot, and it is really making everyone’s life better”.

Smith noted that in Brazil,  nine out of 10 businesses use the instant payments and “we are talking the fruit vendor to the car repair man.”

“And so this is something for everyone. This is not just for the slight few, and for us what we have seen where these kinds of reform are successful, one we see just as is taking place here, the central banks are increasingly leading the way, providing the public good and then letting the financial institutions plug in and use it,” said Smith.

“It is not like the central bank in one way is providing a public service, but then giving this platform so that so much market development can be driven by the financial institutions tailored to the needs of their consumers”.

He said another positive effect of the system, as identified in the countries where it is in operation, is the public and private engagement dialogue, including the consultative process bringing together the key stakeholders and “so everybody is part of this process of driving the digitalising payments in the economy”.

He said the implementation of the system is also promoting competition  “in all the cases where it is really taking off because you’ve got now all financial institutions that can offer the same services as the big banks with this market development”.

The CBB said the IPS will allow individuals, businesses, and government to send and receive payments within 10 seconds, with the recipient being able to access the funds immediately upon receipt.

The banks also said that the system will also be fully interoperable, removing barriers that previously limited such transactions to between individuals who banked with the same financial institution.