EDITORIAL: Is it time for B’dos to go cashless?

WHAT if Barbadians woke up to a world of no ATMs, no coins accepted on the bus? What if all daily financial transactions relied on debit and credit cards? What if Barbados existed without any cash?

Money is an integral part of our existence, economy, and society. All sectors, education to health, tourism to agriculture depend on the ability to exchange goods and services for cash. But can we live without it? The short answer is ‘yes’. Also, in an age of the coronavirus, the urgency to use payment options without physical interaction is immediate.

A recent news story about inadequate payment infrastructure within the local court system is evidence of this reality. While the island continues to use cash, the international territories have started the transition. Sweden and China are the two largest countries that are adopting a cashless system. The Swedes had recorded that cash transactions represented just one per cent of the country’s GDP in 2019. While it is forecasted that 60 per cent of China’s 1.3 billion people will make a purchase via mobile payment in 2023. These countries are wealthy, can a small island state do the same?

Why is cash relevant to Barbados?

Any discussion about payment systems must highlight two main areas: access and acceptance. It is cliché but cash is king and it is the only form of payment that is accessible and accepted at all social tiers within society.

From the corner shop to the five-star hotel, cash is easy to verify, it is tangible and can be transacted quickly. In the markets and small urban and rural communities, micro-enterprises are not financially stable or independent to use any other payment instrument.

Money is difficult to store and it’s dirty

The problem with cash is it is cumbersome to transport, the bearer is at risk of being robbed and it can be dirty both figuratively and literally. In a COVID-19 environment, the virus can hitchhike on coins and paper bills via contaminated hands. There is also the issue of money laundering and other illicit activities that create challenges for local and international law enforcement.

Additionally, the anonymity of cash is a significant issue for governments and tax agencies. A virtual money trail is more transparent, but it also exposes people to invasion of privacy, transaction fees, and hackers.

Where can we start?

Despite its advantages, Barbados in 2021 is not ready to fully transition to a cashless society. The action on its own alienates several vulnerable groups that lack financial security. However, the Barbados Private Sector Association (BPSA), the banking association, and the telecommunications sector must meet to implement affordable and secure online payment platforms for the local commercial and retail industry.

The government agencies also must reassess how they are dispensing and collecting funds from Barbadians. Both suggestions will require a substantial investment in cybersecurity, web design, and information technology. Fortunately, many Barbadians already hold the devices to conduct cashless transactions.

Mobile payments create possibilities and opportunities

According to a Hootsuite report on Barbados’ social media activity, about 110,000 people are using their mobiles. A cashless society gives small entrepreneurs more access to a wider market (if the financial infrastructure permits it). It can also improve efficiency in daily retail transactions and reduce long lines.

Barbados Advocate

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