Equity trader at JMMB Group, Clive Charlton, says transitioning to a cashless society is natural and necessary in a developing economy such as Jamaica.

Speaking on Taking Stock with Kalilah Reynolds, Charlton said digitalising the financial sector has become increasingly important as other industries change.

“I think it’s the natural evolution of technology. We have more efficient machines, and we have cars that can self-drive, so it makes sense that a system (banking and finance) that relies so heavily on process, would also digitise itself,” he said.

For instance, Charlton noted that the country’s heavy reliance on cash is very costly to the Government. He pointed out that Jamaican currency is made aboard, and the technology used to make it harder to counterfeit is expensive. 

“Each time you’re going to introduce a new denomination, there’s also a cost for that. There is a cost for transportation,” the Analyst said.

“Let’s say you go to sell foreign currency to any financial institution. You’ll get less for the physical cash than for a cheque. That’s because that money is not Jamaican currency and it must be transported back to its domiciled country,” he explained.

“The institution has to certify that cash, they have to count it, stack it and then transport it back overseas, so there’s a cost to it. With digital payments that is eliminated somewhat,” he added.

Charlton also noted Jamaica’s large unbanked and underbanked population. He said that with digital payments more people can sign up for mobile wallets and enter the formal banking system.

“In very rural areas it’s found that people don’t have access to banks, don’t have access to ATMs, so you may see more people and institutions adopting this digital transformation,” he said.

“Look what happened with COVID; so many people didn’t have bank accounts so they couldn’t take advantage of the incentives that the Government was offering,” he added.

According to Charlton, while he believes the transition to cashless is necessary, he acknowledged that others have valid concerns about the safety and security of having their money and information digitised. 

“The concerns that people have are born out of distrust. Do we trust our Government, do we trust our leaders of Government? Can we trust our financial institutions? These are all valid concerns,” he said.

“But if it is properly explained and if we develop the trust for the technology being used and the information that is gleaned from this technology, I think people will become more comfortable with it,” he said.

Charlton also noted that the process with not happen overnight and will require serious investment from the public and private sectors.

“I don’t we’ll have a complete elimination of cash within the next 15 years. We’re fairly advanced and we have access to tech but there are some areas of the island that are just far away and far removed and are not ready, don’t have the infrastructure to successfully transition to digital payments and they will continue to use cash,” he said. 

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