JCCUL JCUES is put on hold by the BOJ - ePayment setback means Mozido has been Bewitched

The recent much publicized about-face by the BOJ (Bank of Jamaica) with regards to JCCUL  (Jamaica Cooperative Credit Union League) application to launch their new e-payment services aptly titled JCUES (Jamaica Credit Union e-Payment Services) as stated in the article “BOJ aborts JCCUL e-payment launch” published Friday  March 16, 2012, The Jamaica Gleaner is an indication of how sensitive the Government of Jamaica is about money laundering and more particularly, Tax evasion.

So sudden was the BOJ’s decision to halt the JCCUL’s launch of JCUES that the announcement came a mere 24 hours before its official launch on Thursday March 15^th 2012AD! Worse, no date has been set for when the BOJ will allow the JCCUL to go ahead with the launch of their service as stated in the article “No date set for JCCUL's e-payment system”, published Friday, March 16, 2012 by Y JULIAN RICHARDSON, The Jamaica Observer.

The obvious dejection could be seen on the faces of the delegates representing the Credit Unions of Jamaica as noted in the launch now turned sensitization launch on as stated in the article “JCCUL Converts Epayment Launch To Product Sensitization”, published Sunday March 18, 2012, The Jamaica Gleaner.

Had their launch been successful, they could have gotten a jump on the Commercial Banks, now waxing fat from the surge in interest in VISA Debit Cards as noted in my Geezam Blog article entitled “ScotiaBank’s VISA Debit Card – Jamaica’s Online E-Commerce Renaissance”.

Not only that, had the JCUES been approved and launched on Thursday, a technology similar to Google Wallet with an equally similar name Genius Wallet, would have made paying for goods and services with your mobile phone a reality as described in my blog article entitled “Mozido Jamaica Limited and Mobile Payments - Plants and Zombies say the Gods must be Crazy”.

This development would also have effectively marked the coming of a Cashless Society in Jamaica sans Credit and Debit Cards, much as already exists in Sweden as stated in the article “In Sweden, Cash Is King No More In Sweden, Cash Is King No More” Published Monday  March 19, 2012, The Jamaica Gleaner.

The BOJ’s statement on the matter, which was heavily guided by the Payment, Clearing and Settlement Act 2010, is quite blunt, obvious and clear, quote: “The public is asked to note that Bank of Jamaica has not received, assessed or signed off on the documentation and systems supporting the services proposed to be offered via JCUES. This would be necessary to ascertain whether any underlying risks are appropriately addressed. The bank has directed that the participants not proceed with the launch or offer of these products.”

As a bit of background, the JCCUL, which represents the more than forty two (42) in the thus far JA$66-billion unregulated Sector, does not necessarily answer to the BOJ. That’s the Commercial Banks, if you want to get technical.

Plus, their service, JCUES, was set up in partnership with Austin, Texas-based company, Mozido Jamaica Limited as mentioned in article “Mobile Money Provider Sets Up Shop In New Kingston”, published Wednesday June 8, 2011 by Avia Ustanny, Gleaner Reporter, The Jamaica Gleaner.

Mozido Jamaica was set to be the contractor for the new service, using their technology to provide e-payment services to the many unbanked Jamaicans i.e. Jamaican receiving remittances but not saving them in a traditional Commercial Bank or Credit Union.

A recently completed study on their number as announced by Director of the Centre of Excellence of the Mona School of Business (MSB) Dr Maurice McNaughton as noted in the article “Jamaica Counting On its Unbanked”, published Friday, September 30, 2011, The Jamaica Observer only adds more fur to the desire that the JCCUL and Mozido Jamaica Limited have in accessing this untapped potential money making market.

Mozido’s original intention was to make money from the lucrative US$2 billion estimated remittance market in Jamaica. Their apparent partnership with the JCCUL as stated in the article “JCCUL launches mobile e-payment system” Published Wednesday March 14, 2012, The Jamaica Gleaner is therefore a means to an end, using their phone-to-phone e-payment technology to power the JCUES as a kind of Test sandbox for their real service: Remittances. 

Effectively, the members of the Credit Unions of Jamaica would have been the first guinea pigs for mobile e-payment in Jamaica using the following set of mobile phones:

• BlackBerrys
• Smartphones running Google Android
• Feature Phone running Google Android
• WAP or web-enabled Feature phones

According to General Manager of JCCUL Glenworth Francis, their services are to include:

• Bill payment
• Mobile Phone Top-Up
• Commercial Bank and Credit Union Balance enquiry

They do clearly have Remittances in their sights, as General Manager of JCCUL Glenworth Francis is also quoted as saying: “Other services planned include remittances but this is subject to the approval of the regulator”

It was slated to be rolled out at the following twenty (20) Credit Unions in an initial Pilot launch on Friday March 23^rd 2012AD:

• Jamaica Police Credit Unions
• C&WJ Credit Unions
• St Catherine Credit Unions
• Montego Bay Credit Unions
• Churches Credit Unions

General Manager of JCCUL Glenworth Francis points out that, quote: “Only five credit unions were chosen as the pilot. This was done to ensure the system was compatible to the various financial platforms which credit unions use”

How does their service work? Again the horses mouth speaks best, quote: “Once registered, an activation code will be sent to either the mobile number or the email address provided. After the activation code is received members will set up the service on their mobile phone or the Internet by creating a password, four-digit pin as well as a secret word which gives access to the account”.

For an initial launch, their service prices were not too shabby:

• JA$35.25 for bill-payment
• JA$5.00 for balance enquiry
• No charge for Mobile Top-up Services

Interesting things to note, security-wise:

• Debit Card holders can register for the JCUES service at their respective Credit Unions
• No data is stored on the phone, thereby making theft of mobile phones to gain access to people’s accounts pointless
• All transactions are done using the four (4) digit pin and password over the customer mobile phone, both of which are encrypted

Thus, they can still challenge the BOJ’s ruling in court and in that light could have gone ahead with the launch of their JCUES as they had intended on Wednesday March 14^th 2012AD as stated in the article “JCCUL launches mobile e-payment system” Published Wednesday March 14, 2012, The Jamaica Gleaner.

But security for local transactions is not the main reason for the BOJ blockade. It mainly has to do with the ease with which this service can be used for money laundering as pointed out in my blog article entitled “Jamaican Music Industry 2 Years post-Ban - How Artiste and Booking Agents Launder Money”.

Very easy for someone [read drug don or politician] to basically convert money obtained from an unaudited, unapproved source into a spendable form of currency, and worse, powered by a part of the Banking system that the BOJ really has no control over. Hence the BOJ has every right to be cautious.

Still, the potential draw of Banking remittances from Jamaicans is too hard for JCCUL and their partner Mozido Jamaica Limited to ignore as noted in the article “Battle of the digital wallets” Published Sunday March 18, 2012, The Jamaica Gleaner.

This as both of them have been Bewitched (2005) by the coming boom in Remittances as noted in the article “Remittance Companies Bullish As Transfers Hit New Record” published Sunday March 4, 2012 by Avia Colander, The Jamaica Gleaner.

More articles coming on this topic in the Geezam Blog as this story develops….