My Thoughts on Technology and Jamaica: BOJ to regulate and approve JCCUL JCUES as GraceKennedy joins Jamaican Cashless Society

Saturday, February 23, 2013

BOJ to regulate and approve JCCUL JCUES as GraceKennedy joins Jamaican Cashless Society

“With the implementation of the so-called payment guidelines, it will basically create the conduits for implementation of solutions similar to JCUES. The BOJ's assertions, when they had not endorsed it last year, was that pretty much we had to await the implementation of these guidelines”

Comments by Heston Hutton Managing Director of JCCUL subsidiary, Centralized Strategic Services on Wednesday, February 6th, 2013, The Jamaica Observer

Looks like the JCCUL (Jamaica Cooperative Credit Union League) application to launch their new e-payment services aptly titled JCUES (Jamaica Credit Union e-Payment Services) may be getting the Green Light in April 2013 as noted in “E-money set to roll out in April”, published Wednesday, February 06, 2013, The Jamaica Observer.

This after the BOJ (Bank of Jamaica) had effectively put the kibosh on their plans to make it possible to do Financial Transaction with Remittance money from abroad using your Mobile phone or smartphone. The delay was mainly due to concerns over Money laundering and they fact that the new venture was unregulated as explained in my blog article entitled “JCCUL JCUES is put on hold by the BOJ - ePayment setback means Mozido has been Bewitched”.

Now regulations are in place, with requisite License and Fees geared up for a final consultation by April 2013, some new yet basic lingo in this new Financial Sector is bound to confuse many.

To wit, I’ve got you covered:

1.      Mobile Banking - implies transactions done over the Internetvia either a smartphone, Blackberry of a Computer, be it a Laptop or computer. For safer Mobile Banking, read my handy guidelines in my Geezam Blog article entitled “ScotiaBank’s VISA Debit Card – Jamaica’s Online E-Commerce Renaissance” and “How to use Scotia VISA Debit Card Online
2.      Electronic Retail Payment Services – this is the name given to the Bank, Credit Unions or other entities that’ provider these e-payment or Mobile Money Services.
3.      Retail Payment Service Providers – this is the name given to the companies, Wholesalers and Retailers, Supermarkets, small Businesses, etc. who’ve signed up to accept Transactions via Mobile Money. Effectively equivalent to ownership of a POS (Point of Sale) Rental for NCB (National Commercial Bank) or Scotia Bank.
4.      Agents – representatives of the Electronic Retail Payment Services who have to have certification in Accounting and money management and be license to act on behalf of the Electronic Retail Payment Services. Basically akin to Insurance Agents

Distilled from the legalese of the BOJ and armed with the new terminology above, their Regulations are as thus:

1.      All entities intending to offer Electronic Retail Payment Services are subject to the guidelines
2.      All entities intending to offer Electronic Retail Payment Services are required to apply to the central bank for authorisation before starting operations.
3.      All entities intending to offer Electronic Retail Payment Services are required to maintain sufficient capital to support a minimum net worth of US$100,000 or the equivalent in Jamaican dollars, subject to any changes that the bank shall make from time to time, according to the BOJ.
4.      All Retail Payment Service Providers are required to pay US$5,000 ($461,000) authorisation fees for the initial application for an electronic retail payment services License
5.      All Retail Payment Service Providers are required to pay US$4,500 for renewals for their electronic retail payment services License.
6.      Agents of the Electronic Retail Payment Services that franchise their services to Retail payment service providers are required to pay US$200 for both initial applications and renewal.

Had it gone through, JCCUL mobile product JCUES, which is powered by the technology of partner Mozido Jamaica LLC curiously named the Genius Wallet as explained in my blog article entitled “Mozido Jamaica Limited and Mobile Payments - Plants and Zombies say the Gods must be Crazy”, would have had a virtual monopoly in a Mobile Payment Industry in which they’d be the ONLY players.

Now some ten (10) month later, the BOJ, very much impressed with this technology that’ll make every phone, be it a feature phone or smartphone into a money-machine, has decided it’s too lucrative to be the preserve of just the JCCUL and its 1 million strong membership. It’s gotta be something every Financial Institution can get into, once properly regulated.

The ability to do transactions via either a NFC (Near Field Communications) Sticker or a NCF built into the smartphone as described in my blog article entitled “NFC now supports Device-to-device Data Transfers – Swapping Music in the Castle of My Skin” is too important a freedom to be left unregulated. Or simply via Text messaging identified by the customer SIM (Subscriber Identification Module) to access spendable funds!

Either way, is something of National Interest to the Central Bank, as Jamaica has a serious problem of the Unbanked as described in “Jamaica Counting On its Unbanked”, published Friday, September 30, 2011, The Jamaica Observer and more importantly, Money Laundering and The Lotto Scam. This being as many Jamaicans still do not put their earning in into a Bank Account, thereby making it harder not only tax people but also to gauge the earnings of Jamaicans as well as police Money Laundering.

Eventually the GOJ may even phase out Remittance Agencies, banning them from paying out Remittance cash unless the persons is willing to deposit the money into a Bank Account as a means of making Remittance spending traceable and thereby Taxable.

Already, there are some interested parties – GraceKennedy!

On November 20th 2012 at the Terra Nova All-Suite Hotel, Waterloo Road, Kingston CEO of GraceKennedy, Don Wehby made a presentation on his company at the Stock and Securities Limited Investor Forum as noted in “GraceKennedy responsible for half of Jamaica's remittances, says Wehby,” published Sunday November 25, 2012, The Jamaica Gleaner

There he revealed how well the exports to Africa, specifically Ghana, have been going since September 2012, seemingly poised for explosive growth once they expand to other Countries as noted in “Grace steps good on African path”, published Friday, September 07, 2012, BY CAMILO THAME Business Co-ordinator, The Jamaica Observer.

He revealed that his company, which represents Western Union and has a 75/25 split of the Remittances Services with Western Union and handles approximately 50% of the US$2.2 billion dollars’ worth Remittances coming into Jamaica in 2011, representing some US$1.1 Billion dollars.

Aside from giving insight into GraceKennedy push into investing in Africa as reported in“GraceKennedy looks to Africa ...”,Published Monday | February 13, 2012, The Jamaica Gleaner, he also hinted at the possibility of GraceKennedy going into the Mobile Money Business, quote: “The question that we have to ask ourselves is, how can we retain as much as possible, and I submit to you that if First Global Bank and Western Union work together with a store card and mobile wallet, then that is the answer”.

Thus financial entities i.e. Bank, Investment Institutions, such as Grace Kennedy and First Global Bank interested in Mobile Money may pick up the slack here by partnering with Remittance companies in much the same way the JCCUL has partnered with Mozido Jamaica Limited and offer the Mobile Money product. This especially as Remittances since April 2013 have been rebounding as reported in “Remittances pick up as recession rebound continues”, published Monday | April 9, 2012, The Jamaica Gleaner.

This’ll make it possible for people receiving Remittances to spend their cash in a traceable form via their Mobile phones. The added Security and convenience’ll make this product a sure winner, the main reason why JCCUL had partnered with Mozido Jamaica Limited in the first place as noted in the article “Battle of the digital walletsPublished Sunday March 18, 2012, The Jamaica Gleaner.

The Lotto Scam mainly involves “scammers” taking advantage of older people and having them send money via Remittance Services, claiming it to be a prerequisite to winning a very large cash prize. With the recent spate of arrests related to the Lotto Scam that the Jamaican Police Claim has severely disrupted the Lotto Scam as noted in “'We've greatly disrupted the scam'”, published Thursday January 3, 2013, The Jamaica Gleaner, Mobile Money’s basically being given the “all Clear” by the BOJ for a clean take-off .

As it mainly targets the very Elderly in the US of A, the GOJ’s via the BOJ taking the initiative to properly police this new conduit of Foreign Exchange into Jamaica, as already Jamaica’s seen as being lax on scammers as noted in “Concerns over US documentary on lotto scam”, published Saturday February 2, 2013, The Jamaica Gleaner and “American journalist Dan Rather visits Jamaica for lottery scam documentary” Saturday February 2, 2013 11:49 am, The Jamaica Gleaner.

This as regulating Mobile Money has several potential advantages or side-effects, depending on how you look at it:

1.      The ability to track the Foreign Exchange that come into Jamaica down to who’s spending their money and on what
2.      Effectively Police Money Laundering from Drug Traffickersand the Lotto Scam Jamaica more effectively
3.      Get more Jamaicans into the formal Banking System by making Banking and Spending their Foreign Exchange seamless and easy
4.      The gradual phased introduction of a Cashless Society, of which Mobile Money is a Start.

Already strides are being silently made by some Banks and Public Sector entities in Jamaica:

1.      Internet and Mobile Internet Banking options that are now slowly being enable with Cross-Banking Transfers. This is has been pioneered since September 2012 by CIBC First Caribbean Jamaica and First Global as described in my blog article entitled “CIBC FirstCaribbean Jamaica and First Global introduce Cross-Network Banking - The Avengers for the idea of a Cashless Society and Banking Anywhere”.

2.      JNBS (Jamaica National Building Society) has since November 2012 eliminated the need to have a Bank Account Book and allowing you to conduct Business using your Debit Card only as noted in my blog article entitled “JNBS Introduces Swipe and Go, eliminating Bank Books - Secret of Wings for a Cashless Society in Jamaica”.

3.      JUTC (Jamaica Urban Transport Corporation) has plans to introduce the RFID (Radio Frequency Identification) and NFC enabled Smarter Card system in April of 2013 to replace the Smart Card system as stated in my blog article entitled ”JUTC to debut RFID & NFC Readable SmarterCard Cashless Bus Ticket System in April 2013 - The Last Stand for a Cashless Society to empower the Multi-Modal Concept”. Effectively making traveling on their Buses a Cashless affair!

Thus it’s no coincidence that to me that the JUTC system’s set to come on stream in April 2013 and may in fact incorporate A Universal RFID and NFC based Mobile money Payment Platform. There is now a STRONG developing trend towards Mobile Computing on smartphones and Tablets as noted in my blog article entitled “Blackberry popularity wanes as Jamaicans go smartphones - Android and Apple's Smartphone Revolution” and my Geezam Blog article entitled “Apple iPhone boosts Jamaican smartphone usage as BB goes Chapter 11 Bankruptcy”.

Throw in the possibility of a New Data Telecom Provider coming soon with the recent application of the OUR (Office of Utility Regulation) for a new Area Code as stated in my blog article entitled “OUR applies for new Area Code for Jamaica - Competition in Telecoms in the coming Hunger Game Catching Fire of Mobile Computing” and we have brewing Data Storm that’s sure to attract Telecom Provider to set up Shop in Jamaica.

JCCUL JUCUES, it seems by April 2013, will be the Man of Steel (2013) as GraceKennedy joins in The Last Stand (2013) for a Cashless Society.

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