The Guyana Government has completed a strategy for the National Payment System (NPS) which will make electronic payments and transfer of funds more practicable. It has proposed to have the full system in place by 2030 but in the medium term, a 2017-2021 plan was developed.
The National Payment System (NPS) Development plan was circulated to the media by the Finance Ministry and will be laid in the National Assembly on April 26.
Finance Minister, Winston Jordan on Friday told reporters that the issue of carrying large amounts of cash will be reduced –something which was advocated by the banking association following recent robberies.
“Principally, at the end of the day, (it is) to reduce the incidences of carrying large sums of cash. It will also allow for the exchange of ATM cards and so on, which you know can’t be done at this stage, or certainly I am not going to go to a place that has six different Point of Sales (POS’s) so this will reduce the need for that and cross transactions and so on,” he told reporters at his first press conference for 2018.
The project is being spearheaded by the Bank of Guyana and the World Bank.
The document pointed out that the country’s current NPS lacks the infrastructure necessary to integrate payment services across providers.
“In specific, there is no real time gross settlement system, automated clearing house or card switch. The only infrastructure currently in place to support payment transactions is the National Cheque Clearing House (NCCH). No infrastructures exist in Guyana at present to facilitate electronic fund transfers (EFT) between banks, support interbank money or foreign exchange markets, or enable delivery vs payment (DvP) in securities settlement,” the document said.
However, it was noted that the Bank of Guyana is planning to introduce an EFT in mid-2018.
There are six commercial banks in Guyana- the Bank of Baroda (Guyana) Inc., Citizens Bank Guyana Inc., Demerara Bank Limited, Guyana Bank for Trade and Industry, Republic Bank Limited and the Bank of Nova Scotia. There are also other payment service providers including money transfer agents, post offices and the Guyana Telephone and Telegraph’s Mobile Money.
The NPS development plan noted that the absence of efficient infrastructures impedes the ability of commercial banks to execute their clients’ interbank payments efficiently, and thus affects both public and private sector activity.
“It slows and complicates the payment of government salaries, pensions and other benefits, and payments to suppliers. It also limits the ability of the government to use electronic means to collect payments. For the private sector, it contributes to the heavy use of cash and intrabank transactions,” the plan outlined.
To get the system started, the 2017-2021 strategy defines the priority goals and actions of relevance for the immediate future as well as those necessary to achieve the long-term goals.
Discussion with stakeholders led to the identification of a set of midterm objectives including; establishment of legal clarity and certainty, enhance the efficiency of payment processing and reduce settlement times for both retail and large value transactions, strengthen risk management and mitigation across the NPS and expand accessibility of electronic payment access networks.
It also seeks to; attract higher rates of electronic payment acceptance by vendors, merchants and other providers of goods and services, advance migration of government to electronic payments for both the collections and disbursement of funds, drive remittance costs down and enhance the accessibility of remittance services, strengthen oversight framework and capacity, build stakeholder engagement and cooperation and support commerce.
Jordan said the program will pave the way for the implementation of the Electronic Single Window (ESW) –a system which allows for importers and exporters to only have to submit their information once.
The NPS is only one of the many financial legislation which will be tabled in the National Assembly in the coming months, including one which paves the way for the implementation of Deposit Insurance.
The Government in June 2017 received US$6M from the World Bank to complete the project.
