CarIFS switch concern

President of the Small Business Association (SBA), Wayne Willock, has expressed concern about the potential withdrawal by commercial banks from the Caribbean Integrated Financial Services Inc. (CarIFS) system.

CarIFS, established in 1998, is the locally-based Automated Banking Machine (ABM)-network provider, which allows customers of various financial institutions to have 24-hour access to cash from their bank accounts via any CarIFS-affiliated banking machine and point-of-sale terminals.

“My research recently has indicated that there is currently a movement which seeks to take the CarIFS national debit switch out of operation, in favour of a Visa-branded product,” he told the “Digital Payment Transformation Workshop: The Way Forward”, hosted by the Cave Shepherd Card Unit at the Savannah Beach Hotel.

“If this comes to fruition, it could mean lots of dollars going outside in foreign exchange transaction fees to Visa and of course this is undesirable at this time. We may see then a hike in merchant fees on debit card transaction reaching three, four, or five times the current rate.

“This development, if allowed to take place in the not-too-distant future, will lead to the marginalisation of our credit unions, who also depend on CarIFS and with whom the SBA and its members currently have active partnerships,” Willock pointed out.

He went on to explain that the credit unions would then be forced to adopt either a Visa or Mastercard product, “since with the CarIFS switch, there would be no alternative. Cardholders’ fees might increase and of course a non-competitor monopoly might be created”.

The SBA President is therefore calling on Government to “look at mandating that all local payment transactions or a high per cent of debit transactions, must remain local since we are in a period of retrenchment”.

“Also, maybe the Fair Trading Commission should consider the impact of banks taking this movement, which would be a monopoly of which I spoke on our card payments,” he added.