Digital payment service provider Lynk is hoping that when the Ministry of Labour and Social Security (MLSS) next advertises for service providers to undertake electronic/automatic payments on a bimonthly basis to 128,000 families for the Programme of Advancement Through Health and Education (PATH), it will be considered.

Overall, social security transfers are valued around $27 billion annually. As such, NCB Financial Group’s (NCBFG) Lynk is looking at PATH and other recurring government payments as a market to be tapped as they expand business.

Asked if Lynk was also eyeing regular pension payments and public sector salaries, Denise Williams, chief growth officer at Lynk, told the Jamaica Observer, “We are aiming to integrate Lynk as the preferred payment method for all government disbursements using Jam-Dex. Lynk will provide a safe and convenient solution for consumers and a cost-effective method for government payouts.”

It should be noted that when, in 2018, the MLSS advertised for service providers, mobile money companies had anticipated being given a shot at providing over 200 Jamaicans with payments as often as twice each month. Included were mobile money providers GK MPay, National Commercial Bank’s Quisk, Sagicor with MyCash, and M-Conec with Conec.

The MLSS, however, chose to go with Bill Express, JN Remittance, Paymaster, and direct deposit for most pensioners while continuing with checks and vouchers for some beneficiaries. Remittance payments cost $200 per transaction. As obtains today, there is some hesitancy over the use of digital payment platforms.

NCBFG, which created the new subsidiary Lynk for its newest digital payments product, remains gung ho about snagging the market for recurring government payments, alongside remittances.

Along with PATH, which has 128 beneficiaries receiving money monthly, there are 120 pensioners and another 10,000 social protection beneficiaries.

There is also a potential pool from over 100,000 government workers and a smaller pool of government pensioners who get recurring payments each month.

The MLSS told the Business Observer on Monday, November 28, “The total value of [social security] benefits paid for the fiscal year 2020/2021 was $19 billion. The value of cash grants paid in the same period was $7.8 billion. Additionally, the total of other transfers channelled through the public assistance department in fiscal year 2020/2021 was $298 million.”

No procurement

The MLSS disclosed, meanwhile, that there is no current review of alternative payment options underway. It noted, “Currently, there is no procurement process being undertaken for a digital payment provider. The ministry offers several methods of payments to beneficiaries. Beneficiaries are allowed to choose the option most convenient to them.”

However, NCBFG remains upbeat about the possibilities of adding government transfers as a robust business line.

Williams told the Business Observer, “Processing bulk payments with Lynk has several positive implications for the Government and private sector organisations. Cost efficiency, however, is our number one value proposition — our service allows agencies or corporations to reduce overheads and manual labour. It also reduces the need for cheque and cash disbursements which can be costly to manage and logistically complex, especially during busy seasons like Christmas. Lynk creates a streamlined process that is easier to manage and convenient for the end user who will have access to the disbursed funds from the convenience of their phones. It is also one of the most secure ways to receive payments.”

BOJ pilot

Williams noted that the Government of Jamaica through Bank of Jamaica is about to launch a pilot programme in two constituencies: St Andrew North Western and St Andrew South Eastern. The pilot will facilitate payments from the Constituency Development Fund (CDF), in Jam-Dex, to participating workers in the December cohort of the Employment Generation Programme, popularly known as the Christmas Work Programme.

“We are safely estimating that participation in the pilot will involve up to 100 persons, including workers, who will accept Jam-Dex as payment.”

Williams stated, “The success of this programme would open a huge pathway to embracing digital payments for the CDF, which is projected to disburse up to $21 million per constituency.”

Lynk is sure that, as the only wallet that can accommodate Jam-Dex payments at this time, it has an edge.

Williams noted, “Lynk has been working with BOJ in an extensive public education programme in these and other communities to educate residents about the pilot and the value that this digital currency brings to their lives in terms of safety, ease and convenience.

“From Lynk’s perspective, the pilot programme also allows us to assess the needs of the current government payment processes to better tailor our ‘bulk payment’ feature, which we will offer to HEART, other government agencies and private sector organisations. The lessons learned from this pilot will help us make the programme easily scalable for islandwide implementation in 2023. Our aim is to offer the Government and other organisations an efficient and effective solution to disburse salaries to all Jamaicans — with or without access to a bank account or bank card.

“Collaboration is extremely important as we implement these programmes; we are working very closely with the Government and Bank of Jamaica to ensure the success of this pilot. Community engagement is also key as we are meeting with residents and business owners to assess how our platform can be integrated into their everyday lifestyle with ease, convenience, and safety in mind.”

She said that globally, “Governments are aiming to reduce cash and promote the use of a central bank digital currency — in our case, Jam-Dex. Promoting digital currency and building a digital economy allows the country to increase rates of financial inclusion for the unbanked or underserved — those who could not participate fully in the formal economy through a bank account because of a lack of documents or access.

“Promoting a digital economy creates innovative opportunities that also make it cheaper and easier for the Government to provide services to people.

Meanwhile she stated, “The injection of Jam-Dex on the platform creates liquidity on the app. This digital currency allows our users to spend and engage on the app through transfers, bill payments and top-ups.”

To date, NCBFG has not disclosed the total investment in Lynk.