An­drea Perez-Sobers
Se­nior Re­porter

an­drea.perez-sobers@guardian.co.tt

The lack of dig­i­tal lit­er­a­cy aware­ness is hin­der­ing the coun­try from mov­ing in­to the dig­i­tal trans­ac­tion realm.

That’s the rev­e­la­tion by John Out­ridge, chief ex­ec­u­tive of­fi­cer of the Trinidad and To­ba­go In­ter­na­tion­al Fi­nan­cial Cen­tre (TTIFC).  

In an in­ter­view with Busi­ness Guardian last week, he said the Na­tion­al Fi­nan­cial In­clu­sion Sur­vey Re­port 2023 il­lus­trat­ed that 63 per cent of gen­er­al trans­ac­tions are done in cash with peo­ple cit­ing that they feel com­fort­able trans­act­ing in cash.

Con­cern­ing dig­i­tal lit­er­a­cy aware­ness, Out­ridge said the re­port out­lined that 56 per cent of the pop­u­la­tion lacks the knowl­edge to utilise mo­bile bank­ing apps ef­fec­tive­ly.  

In ad­di­tion, he said re­spon­dents not­ed through var­i­ous ways that gen­er­al in­for­ma­tion giv­en by the fi­nan­cial sec­tor to help with ac­counts or re­solve is­sues is of­ten seen as cum­ber­some, con­fus­ing, and at times − un­friend­ly.

An­oth­er hin­drance he point­ed out, is that the fi­nan­cial­ly ex­clud­ed pop­u­la­tion has con­cerns about the se­cu­ri­ty and pri­va­cy of dig­i­tal trans­ac­tions through the fo­cus group ses­sions from the 2023 sur­vey many fi­nan­cial­ly ex­clud­ed par­tic­i­pants have con­cerns about both ATM se­cu­ri­ty and dig­i­tal trans­ac­tions.

When probed fur­ther, he said par­tic­i­pants of the sur­vey shared that “I know noth­ing, or know very lit­tle, about on­line pay­ments. I don’t have ac­cess to the in­ter­net; there­fore, I can’t ac­cess on­line pay­ment por­tals. I don’t have the re­quired means for on­line pay­ments. I don’t think on­line pay­ments are se­cure. Pay­ing in cash is much eas­i­er than pay­ing on e-por­tals.”

Fur­ther, the re­port stat­ed con­cerns about pri­va­cy and trust in dig­i­tal pay­ments high­light the need to bet­ter un­der­stand es­sen­tial fac­tors in pay­ment ser­vices, in­clud­ing user se­cu­ri­ty, in­for­ma­tion pro­tec­tion, and pay­ment mon­i­tor­ing and record­ing.

Out­ridge not­ed, how­ev­er, the gov­ern­ment es­tab­lished a jour­ney and a part­ner­ship with In­dia, in 2016, where they had their own fi­nan­cial in­clu­sion chal­lenge and went through its de­mon­eti­sa­tion ex­er­cise.

“In­dia is a very large pop­u­la­tion ge­o­graph­i­cal­ly and num­bers-wise, and there was a heavy de­pen­dence on cash, and their biggest prob­lem was, which is sim­i­lar to Trinidad, you had a lot of peo­ple who lived in rur­al com­mu­ni­ties and op­er­at­ing in cash was not con­ducive, es­pe­cial­ly when one has to send mon­ey to fam­i­lies in re­mote places.

.“In­dia es­tab­lished the UPI, Unit­ed Pay­ment In­ter­face, right, which act­ed as a re­al-time pay­ment sys­tem tar­get­ed to the fi­nan­cial­ly ex­clud­ed. Fast for­ward now to 2022, over 46 per cent of all re­al-time pay­ments glob­al­ly are done in In­dia, so that sys­tem has ex­plod­ed,” he ex­plained.

To push dig­i­tal pay­ment more, Out­ridge said TTIFC has been en­gag­ing with the bank­ing sec­tor and with the cred­it union sec­tor.

“I think the cred­it union sec­tor holds a lot of po­ten­tial be­cause you have, you know, a large per­cent­age of the pop­u­la­tion that fa­cil­i­ties with the cred­it unions. Now, and more im­por­tant­ly, you’re see­ing they’re look­ing for the abil­i­ty to trans­act from their ac­count, you know. I think there are a lot of op­por­tu­ni­ties open­ing up.”

Al­so, with the pro­lif­er­a­tion of lo­cal e-com­merce plat­forms, like Food Drop, WeEat and TT Rideshare, Out­ridge in­di­cat­ed that there have been many changes hap­pen­ing on these plat­forms, es­pe­cial­ly since COVID-19.  

“From the fi­nan­cial sec­tor, you will re­al­ize al­most all mer­chants now, or a ma­jor­i­ty of mer­chants, have tap-to-pay en­abled. And all cards that are is­sued in Trinidad and To­ba­go, we have close to a mil­lion cards that are both deb­it and cred­it is­sued.”

“We have a pop­u­la­tion of 1.4 mil­lion. All those cards can be tapped and paid. So, you’re see­ing a lot of move­ment, in­fra­struc­tural­ly, pol­i­cy-wide,” he dis­closed.

How­ev­er, Out­ridge not­ed that the biggest gap now is re­al­ly around lit­er­a­cy and aware­ness.

“The econ­o­my would ben­e­fit from be­com­ing cash­less, as this would pro­mote equal­i­ty for every­one and re­duce the use of cash, which lacks trans­paren­cy in its us­age. At the same time, he ac­knowl­edges that cash is a “del­i­cate thing” for the av­er­age cit­i­zen.

He not­ed that with the rise in rob­beries car­ry­ing cash can be un­safe.

In terms of mov­ing ahead with the dig­i­tal plat­form, as it re­lates to gov­ern­ment min­istries, Out­ridge high­light­ed that so far the Ju­di­cia­ry, the Hous­ing De­vel­op­ment Cor­po­ra­tion Min­istry of Trade, The En­vi­ron­men­tal Man­age­ment Au­thor­i­ty , and the Na­tion­al Se­cu­ri­ty, are util­is­ing the plat­form cre­at­ed by the TTIFC.  

In giv­ing an up­date, the CEO said the Li­cens­ing Di­vi­sion is launch­ing at the end of this month.  

“This would be both for on­line trans­ac­tions for, like, cer­ti­fied copies, stu­dent per­mits, the U-turn tick­ets, as well as do­ing self-ser­vice pay­ment in Carni, Li­cens­ing Di­vi­sion. Re­cent­ly, it was an­nounced that Prop­er­ty Tax is now ac­cept­ing bank pay­ments.

TTIFC is now try­ing to en­gage with the dif­fer­ent gov­ern­ment agen­cies to get them ready to ac­cept dig­i­tal pay­ments,” he de­tailed.

“Im­ple­ment­ing dig­i­tal pay­ments in gov­ern­men­tal and oth­er fi­nan­cial ser­vices is es­sen­tial for com­bat­ing cor­rup­tion and en­hanc­ing ser­vice per­for­mance, as well as fi­nan­cial ac­count­abil­i­ty,” Out­ridge high­light­ed.

Out­ridge said he agrees with the Na­tion­al Fi­nan­cial In­clu­sion Sur­vey Re­port 2023 that tran­si­tion to a cash­less econ­o­my re­lies on adopt­ing the no­tion that a cash­less econ­o­my does not mean the erad­i­ca­tion of cash but rather, an in­crease in al­ter­na­tive pay­ment op­tions that do not re­quire phys­i­cal cash.

Lessons to be learned from oth­er coun­tries

Ac­cord­ing to the web­site www.di­va-por­tal.org, Swe­den’s cash­less jour­ney be­gan in the ear­ly 2000s, and by 2005 Swedish banks be­gan phas­ing out cheques in favour of elec­tron­ic trans­fers, en­cour­ag­ing dig­i­tal trans­ac­tions as a more se­cure and con­ve­nient al­ter­na­tive

.The in­tro­duc­tion of the mo­bile pay­ment app Swish in 2012, de­vel­oped by six ma­jor Swedish banks, marked a sig­nif­i­cant turn­ing point. Swish al­lowed re­al-time, per­son-to-per­son pay­ments via mo­bile de­vices and quick­ly be­came one of the most pop­u­lar dig­i­tal pay­ment meth­ods in the coun­try.

The de­cline in Cash Us­age: Around 2015, Swe­den’s re­liance on cash be­gan to drop sharply, with few­er busi­ness­es ac­cept­ing cash and more con­sumers pre­fer­ring card and mo­bile pay­ments. By 2016, cash trans­ac­tions ac­count­ed for on­ly about 15 per cent of re­tail trans­ac­tions, down from around 40 per cent in 2010

2017: The Swedish cen­tral bank, Riks­bank, be­gan ex­plor­ing the con­cept of an e-kro­na, a cen­tral bank dig­i­tal cur­ren­cy (CB­DC), as a po­ten­tial al­ter­na­tive to phys­i­cal cash, giv­en its de­clin­ing us­age.

Turn­ing to Cana­da, the Cana­di­an Pay­ment Meth­ods and Trends re­port out­lined that the coun­try’s ef­forts on a steady tran­si­tion to­ward a cash­less econ­o­my and fac­tors such as con­sumer pref­er­ences and tech­nol­o­gy adop­tion have been a dri­ving force in re­duc­ing the pop­u­la­tion’s re­liance on cash.  

Some key in­sights were shared:

-By 2021, the vol­ume of cash pay­ments de­clined by 62 per cent over the pre­vi­ous five years. The COVID-19 pan­dem­ic al­so ac­cel­er­at­ed peo­ple’s use of dig­i­tal pay­ments.

-Cash us­age al­so de­clined as the pref­er­ence for deb­it and cred­it cards for low-val­ue trans­ac­tions at POS in­creased. Cana­di­ans found that pay­ing in cash is less con­ve­nient.

-Since the pan­dem­ic, con­tact­less pay­ments grew con­sid­er­ably through con­tact­less card pay­ments, mo­bile wal­lets and In­ter­ac e-Trans­fer pay­ments.

-Cre­at­ed in 2003, In­ter­ac e-Trans­fer, pro­vid­ed by In­ter­ac (a Cana­di­an In­ter­bank Net­work) is a dig­i­tal pay­ment ser­vice in Cana­da that al­lows in­di­vid­u­als and busi­ness­es to send and re­ceive mon­ey di­rect­ly from their bank ac­counts via email or text mes­sage.