Poor
JCCUL (Jamaica Cooperative Credit Union League) and Mozido Jamaica!
Their
one chance to jump ahead of the competition with their unique e-payment Service
aptly titled JCUES (Jamaica Credit Union e-Payment Services) has been railroaded
by the BOJ (Bank of Jamaica) back in March 2012, which really has no oversight
over them as noted in my blog
article entitled “JCCUL
JCUES is put on hold by the BOJ - ePayment setback means Mozido has been
Bewitched”.
And
there’s still no word from the BOJ (Bank of Jamaica), Jamaica’s Central Bank, as
to when they can start as stated in the article “Mobile
wallet providers race to the starting line - Casserley, AIS among
investors-in-waiting”, Published Wednesday July 10, 2013, The Jamaica Gleaner!
The
concern back then was Money Laundering was possibly facilitated via this new Mobile
Money Service that was powered by Mobile Wallet expert Mozido Jamaica Limited.
But since the BOJ intervened as chronicled in my blog
article entitled “BOJ
to regulate and approve Mobile Money Industry in Jamaica - JCCUL JCUES is the
Man of Steel as GraceKennedy joins The Last Stand for a Cashless Society”
rumours have been bubbling that Mobile Money Service would be rolling out in
Jamaica by April 2013 with some new
entrants into the game.
April
2013 has come and gone and still no word from the BOJ.
Based
on the article “Mobile
wallet providers race to the starting line - Casserley, AIS among
investors-in-waiting”, Published Wednesday July 10, 2013, The Jamaica Gleaner,
there are some new entrants coming into the now soon-to-be-regulated Mobile Money
arena. These new players are mainly partnerships similar to JCCUL (Jamaica
Cooperative Credit Union League) and Mozido Jamaica between a Bank and Mobile Money
Service Provider are:
1. Advanced
Integrated Systems (AIS) of Kingston and US-based MOBIbucks
2. BPO
(Business Process Outsourcing) entrepreneur Jamaican, Patrick Casserly via his
Florida based company eMagination Ltd in partnership with PayToo Mobile Wallet
Based
on Kingston Beta, Ingrid Riley’s bi-monthly Tech pow-wow that’s been held every
since 2007and was recently held in May 2013 at JAMPRO, it seems many a debutante
Mobile Money Provider have sprung up as stated in “Start-ups
want Mobile Money now”, Published Wednesday May 8, 2013, The Jamaica Gleaner.
They are impatient to have Mobile Money Services in Jamaica, pending the BOJ
Regulatory Framework in place to prevent Money Laundering.
Very
true, as after all, the other Money Transfer Services, while not Mobile in
nature, are heavily regulated within the US, allowing persons to only transfer Money
between Bank Accounts or use their Services to buy things online securely, such
as PayPal, which I’ve used before with my Scotia Visa Debit Card as described
in my Geezam blog
article entitled “How
to use Scotia VISA Debit Card Online”.
This
type of transactions from Paypal and Google Wallet are allowed in Jamaica as it
involves a Local Bank Account going through a Service Provider abroad e.g.
Paypal, Google Wallet to enable purchasing activity on the Internet. What Mobile
Money aims to do is to allow Jamaicans Locally to transfer Money from abroad sans the Banks via Remittance Services, the main aim of the JCCUL
and Mozido Jamaica partnership in the form of JCUES as explained in my blog
article entitled “Mozido
Jamaica Limited and Mobile Payments - Plants and Zombies say the Gods must be
Crazy”.
This
is what the BOJ will not allow.
The Unbanked – The Lost
Sheep seeking a Shepherd
According
to Deputy Governor of the BOJ, Livingston Morrison at Kingston Beta back in May
2013, quote: “There are some who say 35 to 65 per cent of the population is unbanked,
yet penetration for Mobile is at over 100 per cent, so there are opportunities
there. However, the unbanked can only be served by the Banks”.
It
is the reason why the inner working of Mobile Money Banking shrouded in so much
mystery, as it involves Money handles by non-Bank Service providers and give
the unbanked the ability to use it remittances i.e. Money sent from abroad here
Locally without having a Bank Account.
These
Jamaicans are called unbanked in Jamaica and are Jamaicans who are a focus
group of a study by the Director of the Centre of Excellence of the Mona School
of Business, Dr Maurice McNaughton back in 2011 stated in “Jamaica
Counting On its Unbanked”, published Friday, September 30,
2011, The Jamaica
Observer.
The
unbanked, estimated to be as much as 65% of the Jamaican population are of
interest to the GOJ (Government of Jamaica) as they are not only the largest
users or Remittance Services, their main means of survival, but they also have
huge amounts of Money that’s not flowing through the formal Banking System. More
precisely, the statistics from the Mona School of Business, recently quoted by
the Minister of State in the Ministry of Science, Technology Energy and Mining
Julian Robinson tell a more precise tale of the unbanked:
1. 34%
of Jamaicans above 18 years do not own Bank accounts
2. 66%
of Jamaicans above 18 years own Bank accounts
3. 12%
of Jamaicans above 18 years who own Bank accounts have Debit Cards attached and
use them actively for Transactions
4. 80%
adult Jamaicans have limited access to low-cost, efficient and user-friendly Banking
Services
Mobile
Penetration in Jamaica is almost 3
million people and Mobile internet’s growing year by year according to OUR
(Office of Utilities Regulation) Statistics for the Fourth Quarter of 2010 and
the Second Quarter of 2011 as stated in the articles , blog
article entitled “OUR
Records Voice Decline for the Fourth Quarter of 2010 - Postpaid, Data Services
and Fixed Line Mobile and Landline Saturday Night Fever for Telecom Providers”
and “OUR
Telecom Provider Stats indicate JA$14 billion profit for Second Quarter of
2011AD - Telecom Providers Stacking up all Faces on the Argo Video Calling and
VoIP on Smartphones”.
BOJ Regulation’s Agenda
– GOJ Taxation of Remittances as Income
With
Jamaicans, mostly Millennials (ages 18 to 28) ditching Blackberries for Smartphones
since 2012 as opined in my Geezam
blog
article entitled “Apple
iPhone boosts Jamaican smartphone usage as BB goes Chapter 11 Bankruptcy”
and my blog
article entitled “Blackberry
popularity wanes as Jamaicans go Smartphones - Android and Apple's Smartphone
Revolution” this 34% unbanked
and 80% with lack of easy access to Banking Facilities, a hurdle to
Traditional Banking in Jamaica, presents a huge opportunity for the GOJ to go
after uncollected Taxes in Jamaica by making the Unbanked a part of the Formal Banking
System.
After
all, Money from remittances, despite being a benevolent donation by relatives
abroad to assist with the hardships of living in Jamaica, is for many their
only source of revenue. Once Remittances come into Jamaica, the recipient is
paid in Local currency, not US dollars. But as this may also be a source of
income, it’s basically a salary and is thus subject to Income Taxes.
CEO Don Wehby Mobile
Money Gambit - Remittance Service Extinct in 2015
The
big entrant was expected to be GraceKennedy Limited, being as they are the
largest handler of Remittance in Jamaica, handling almost 50% of all
remittances as stated in the article “GraceKennedy
responsible for half of Jamaica's remittances, says Wehby,”
published Sunday November 25, 2012, The
Jamaica Gleaner.
GraceKennedy
has since indicated an interest in entering the Mobile Money game based on the
article “GK
goes after Mobile Money”, published Wednesday, May 22,
2013 BY SHAMILLE
SCOTT Business reporter, The Jamaica Observer.
But
first, a quick look at Kenya.
In
Kenya, Mobile Money Services based on the M-Pesa System has killed off Money
Transfer businesses due to the sheer convenience of using your Mobile phone to do
Banking transactions and paying for Services without having to draw for a
Credit Card, Debit Card or carry huge sums of Money. The fact it’s so popular
there may also have to do with the terrain and huge distances in this African
country, which makes it necessary to have any Service that can easily transfer Money
from one part of the country to the other.
Even
if you factor in the idea that people in Kenya may steal Mobile Phones, the
mere fact that it may be as easy to block their Mobile phone’s SIM (Subscriber
Information Number) or Mobile phone handset as it is in Jamaica as stated in my
blog
article entitled “How
to Register your SIM Card and get the PUK1 and access Digicel’s Phone Calling
Records” as well as strong regulatory framework may also explain
its popularity in that country.
No
doubt it went through a teething period of people not trust in to final
acceptance, especially given its’ convenience and the terrain in Kenya. Plus
now that you use your Mobile phone to do financial transactions, it puts extra
onus on the users to keep their Mobile phone secure. To this end, one of the
possible solutions was to register the Mobile phone number using Government
Identification in Kenya and use the phone number itself as the Bank Account
Number, necessitating that the Mobile Money Provider had to partner with as Bank.
This
is the main reason why the above mentioned partners, despite their business
clout, may have problems; the BOJ won’t allow them to do business unless they:
1. Partner
with a Local Bank that fill accredited and registered with the BOJ
2. Comply
with the regulations as mentioned in my blog
article entitled “BOJ
to regulate and approve Mobile Money Industry in Jamaica - JCCUL JCUES is the
Man of Steel as GraceKennedy joins The Last Stand for a Cashless Society”
3. Ensure
that all Mobile users are have their Mobile Phones be Postpaid or Registered
with their Telecom Provider using a Government ID as described in my blog
article entitled “How
to Register your SIM Card and get the PUK1 and access Digicel’s Phone Calling
Records
4. Use
the person’s Mobile Number, SIM (Subscriber Identification Module), IMSI
(International Mobile Subscriber Identification) for the SIM and IMEI
(International Mobile Equipment Identification) for the Mobile Phone to fully
register and identify the customer, necessitating that the Mobile Money
Provider also partner with a Local Telecom Provider
5. Telecom
Providers have to have a means of securely locking down Mobile phone and their
associated Bank accounts in case the Mobile phone is stolen. This may require
that Telecom Provider provide tracking Services for Smartphone users or
smartphone users get a Tracking App from the Mobile Money Provider
GraceKennedy
CEO Don Wehby, realizing it’s potential to make their business model extinct
overnight has indicated their interest and how this would be done via their
subsidiary First Global Bank, quote: “First Global in collaboration with Grace
Kennedy has the intention to get into the wallet of Mobile Money Services. What
is clear is that a large percentage of our population don't have Bank Accounts.
We believe there is a huge opportunity for Mobile Banking.”
With
so many Jamaicans not having Bank Accounts and yet receiving Remittances from
abroad, they seemed a shoe-in for Mobile Money, which back then US Economist
Dr. Dawn Elliot predicted would be very popular among the unbanked due to is
user-friendly nature “Mobile
Money breakthrough predicted for Jamaica”, Published Friday
January 6, 2012 3:26 pm, The
Jamaica Gleaner.
Cashless Society – Smartphones and Mobile Money are the Perfect
Storm
So
in summary, the Cashless Society is coming and it’s awaiting the BOJ’s
approval. Throw in the fact it was tied closely to Jamaica’s growing affection
for Smartphones and we have the perfect Storm for the transition of Jamaica
into a Cashless Society with the Unbanked who receive Remittances spending
their Money via Mobile Money Services.
The
BOJ needs to move quickly to set the regulatory Framework in place to make it
possible sans the possibility of Money
Laundering. This would’ve given JCCUL Competition in this nascent Field that’s
a herald for the Cashless Society as Smartphones and Mobile Money are The Perfect Storm
(2000) and Curse of Chucky (2013).
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