Wednesday, Jul 24, 2019
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Nat’l ID program would reduce risks of digital payment services

The Bahamas is treading cautiously in the area of digital payment services because of the inherent risks involved, Governor of the Central Bank of The Bahamas (CBOB) John Rolle said yesterday.

Rolle, who was answering questions following CBOB’s quarterly update, said technology and the issues related to it come into play when considering upgrades to digital payment services.

He added that a national identification program should be in place to reduce those risks to financial institutions.

“Technology risks exist whether as a central bank or as an individual financial entity,” said Rolle.

“A lot of those risks exist today because we clear checks electronically. We clear all of our large payments electronically, so we have a real-time payment system and we have a retail payment system and in all of those cases we have to manage the risk and the risk escalating in terms of the kinds of threat.

“We do know that our posture surrounding those have to be proactive.”

Rolle said digitizing payments presents concerns around abuse of financial systems, which he said can be quelled through a national identity infrastructure. He added that that infrastructure would also help customers establish relationships with banks much easier.

The International Monetary Fund (IMF) in its most recent Article IV Concluding Staff Statement points out that while the CBOB is looking at creating its own digital currency in order to increase financial inclusion across the archipelago, it can also achieve inclusion using technology that exists today.

“New financial technologies can advance financial inclusion; nonetheless, risks involving a central bank digital currency need to be well understood,” the IMF states.

“Wider geographic penetration of digital payments can also be achieved by modernizing payment systems and using proven technologies.

“The CBOB is planning to pilot a digital central bank currency to boost financial inclusion. The team welcomes the CBOB’s emphasis on protecting against risks to financial stability, cybersecurity and in the AML/CFT sphere, and recommends that relevant safeguards be carefully reflected in the project design.”

Bahamians have been asking for some time why The Bahamas has been so slow to adopt much of the technology they see used at retail locations in the U.S.

Yesterday MasterCard announced that its MasterCard Engage services have been introduced into the Latin American and Caribbean (LAC) region and bring with it many of the advancements popular today.

In its press statement the company said: “Banks and merchants that decide to work with qualified vendors in Mastercard Engage will likely eliminate the need to experiment with unfamiliar technologies on their own, reducing the risk of long troubleshooting periods during project development, and increase their speed to market.”

Chester Robards

Senior Business Reporter at The Nassau Guardian
Chester Robards rejoined The Nassau Guardian in November 2017 as a senior business reporter. He has covered myriad topics and events for The Nassau Guardian.
Education: Florida International University, BS in Journalism
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