THE Small Business Association of Jamaica (SBAJ) is calling for an extension of the timeline to phase out paper cheques as it warned that the pace of the transition could place additional pressure on micro, small and medium-sized enterprises (MSMEs) that still rely on the payment instrument for day-to-day business transactions.

Speaking in an interview with the Jamaica Observer this week, SBAJ President Garnett Reid said members across the association’s network of more than 700 businesses have raised concerns about the planned elimination of cheques — arguing that they need more time to adjust and access affordable alternatives before the payment method is completely withdrawn.

“Since the announcement of the phasing out, a number of our members have continued to ask us what will happen to those who use cheques. Right now, more than 20-30 per cent of them use cheques to settle transactions,” Reid told the Business Observer.

Small Business Association of Jamaica President Garnett Reid says it is fundamentally unrealistic to Expect a micro-merchant in rural Jamaica to instantly shift away from paper cheques to high-fee commercial options when they cannot even spend or accept JAM-DEX at local wholesalers.

“We are not against the move to modernise Jamaica’s financial system, but the current schedule is too aggressive, particularly for a large number of small operators who lack the resources, digital infrastructure, and training needed to transition smoothly. What we are therefore calling for is an extension of the time frame by even a year,” he said, while noting that the extension would give businesses more time to adapt while the banking sector and other stakeholders strengthen the systems needed to support digital transactions.

Under the schedule established by the Bank of Jamaica (BOJ) and the Jamaica Bankers Association (JBA), the phased reduction in cheque clearing began on September 1, 2026, with cheques valued at $1 million or more no longer being accepted or processed. The threshold is scheduled to fall to $500,000 on March 1, 2027 and then $100,000 by September 1, 2027, before a complete elimination of cheques takes effect on March 1, 2028.

The BOJ, which has noted the phase-out as part of efforts to reduce systemic risks, said it will also encourage the settlement of high-value transactions through electronic channels, including the Real-Time Gross Settlement (RTGS) system and Automated Clearing House (ACH) infrastructure.

REID… we are not against the move to modernise Jamaica’s financial system, but the current schedule is too aggressive

Cheque usage locally, which has continued to decline steadily over the last two decades, saw volumes processed in 2025 falling 12.6 per cent to 2.4 million, as total value also declined 6.9 per cent to $444 billion. This compares with more than 8.4 million cheques valued at approximately $2.3 trillion processed in 2010.

Despite the decline, Reid said cheques remain important to some small businesses and as such, the transition must account for those that continue to depend on the instrument.

“Forcing micro-merchants into alternative routes like RTGS drives up ad valorem fees and transactional overheads that strip away the razor-thin profit margins of small businesses. We cannot strip a trusted financial instrument from the economy when the digital infrastructure remains broken,” he said.

SBAJ’s call comes amid recent legal challenges to the phaseout, which has seen at least two church groups stepping out recently to seek judicial review of the decision. The groups, in accusing the central bank of exceeding its legal authority, also said the planned phasing breaches the right of Jamaicans to equitable treatment. They have also similarly indicated that their members frequently use cheques to conduct business, pay bills, and settle debts.

The SBAJ said its concerns were further compounded by what has been a slow roll-out of the central bank digital currency JAM-DEX, which was introduced to support a more efficient and accessible payment system.

Reid said the pace of adoption, which has left some small businesses without practical alternatives to the payment methods they currently use, has also widened the digital divide between the push for financial modernisation and the readiness of merchants on the ground.

“We are in a digital era and SMEs are told every day to grow their digital footprint and increase digital acceptance… but I don’t think we’re all ready yet,” he said, pointing to the need for more training and support for business owners unfamiliar with digital payment platforms and online banking.

Highlighting gaps in the digital payment infrastructure, including limited access to compatible point-of-sale systems and digital wallets, the association further said these pose significant challenges for businesses seeking to make and receive digital payments across their supply chains. It stressed that merchants must be able to collect payments from customers, pay suppliers and purchase inventory using accessible and affordable options and in cases where digital currency is not widely accepted businesses will have to rely on alternative electronic transfers that usually attract higher transaction costs.

“We are modernising the top tier of the economy while leaving our grass roots businesses stranded. Right now, point-of-sale (POS) integration for JAM-DEX is incomplete and there are far too few active wallet providers in the market. Expecting a micro-merchant in rural Jamaica to instantly shift away from paper cheques to high-fee commercial options when they cannot even spend or accept JAM-DEX at local wholesalers is fundamentally unrealistic,” Reid said.

As part of the response, he urged the BOJ, commercial banks, and other stakeholders to work together to strengthen digital payment infrastructure, expand merchants’ access to digital wallets, and provide practical training to help business operators understand and use available payment options.

“Small businesses represent the backbone of the Jamaican economy. Modernisation should lift us up, not lock us out. We stand ready to collaborate with the central bank, but we will not sit quietly while our members are forced out of the financial system by an unforgiving timeline,” Reid said while stressing that the transition cannot be treated simply as a change in banking policy, but as a broader shift that must take account of the financial and technological realities facing small businesses.