Cash still king, despite Covid

As restrictions tighten due to Covid-19 more people are turning to electronic channels to make payments. At least that’s what global data suggests. But things are a little different in Jamaica. The latest data from the Bank of Jamaica (BOJ) show that Jamaicans still prefer to use cash when completing transactions. The data revealed that digital transactions declined in July and August.

“Our experience has been that currency remains king in Jamaica, so while the public originally would have switched to online transactions in the context of the lockdown, to the extent that restrictions have been eased over time and people have been able to move about again they may be switching back to using currency as the preferred means of transactions,” said BOJ Deputy Governor, Robert Stennett while speaking at the bank’s quarterly monetary policy press briefing.

He noted that the largest category showing a decline is the central bank-owned Real-Time Gross Settlement (RTGS) which refers to people using online systems to make transactions through commercial banks. While there is no clear explanation as to why Jamaicans aren’t sticking with the digital payment trend, Mr. Stennett gave his assumptions.

“There may be system related issues that we need to consider,” he said.

As central bank officials tried to make sense of the trend, BOJ Governor Richard Byles noted that the decline might not be an indication that consumers prefer cash, but more so a reflection of economic sluggishness.

“I wonder, because RTGS tends to be for more large transactions, with slowdown in business activity isn’t that driving the proportion of RTGS down. That might be part of the explanation,” said Byles.

He noted that the true test of Jamaicans affinity for cash will come with the roll out of the central bank digital currency.

“I want to take a moment to speak about our central bank digital currency, which we aim to pilot next year and hopefully for Christmas be able to deliver it to all Jamaicans. I’m expecting that if you ask me that question after it’s launched, give us about three months, maybe we can show you some stats that show cash is less king and that electronic forms of payments are rising,” he said.

In the meantime, the global digital payments industry continues to grow exponentially, creating worry that Jamaica might be left behind.

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