PayWise Ltd is the first company authorised to issue e-money domestically.
This not only represents a significant step for PayWise but also for T&T; taking the country one step closer into the Fintech (financial technology) realm.
In an interview with the Sunday Business Guardian founder and owner of PayWise Ian T Alleyne said he was not surprised by the Central Bank’s announcement.
Rather, he described the achievement as a culmination of efforts over the last two years.
“For two years our application process has been ongoing. We were hoping with all of that effort we would be among the first, if not the first to be granted the approval,” Alleyne said.
Additionally, he said this can facilitate the growth of T&T’s Fintech industry with more companies expected to come on board.
“Being granted the approval to do so is definitely a significant milestone in the development of the company.
“We believe PayWise can provide an alternative payment method and alternative financial services that can lead to expanding the services in the local financial market,” Alleyne said.
This week, the Central Bank issued a provisional registration to PayWise Ltd as an e-money issuer.
The bank said the provisional registration authorises PayWise to issue e-money in this country from September 1, 2022.
Under the terms of the provisional registration, PayWise will be allowed to enlist new customers in a controlled environment monitored by the Central Bank.
According to the Central Bank, e-money can be broadly defined as an electronic store of monetary value on a technological device (including mobile phones) that may be widely used for making payments to entities other than the e-money issuer.
It can also be used for payment transactions with or without bank accounts.
In detailing some of the specifics the Central Bank required from PayWise, Alleyne said this entailed a full business proposal, demonstration of its mobile app, providing details regarding the company’s operations, showing how customers’ funds will be secured, how customers will be able to use the facility while also ensuring there’s no breach of confidentiality and above all ensure full transparency.
Alleyne said that PayWise will also need to update the Central Bank on the onboarding of new clients as well as submit “periodic reports” on compliance and operations.
So how will e-money work in T&T?
According to Alleyne, the process is simple; using just a touch on a mobile device.
“Persons can download an app, register with us--all free of charge--and load money onto their mobile wallet. The app in itself is a mobile wallet.
“When they load money they will be able to make payments to persons within T&T and also pay businesses. They will be able to put money onto the app using cash,” Alleyne explained, adding that payments can also be made via credit card.
Transferring money, he reiterated, is just as easy as it just requires a person’s mobile number to make the transaction.
This, he added, offers the “man-on-the-street” and small businesses a more flexible way to make and receive payments.
But this avenue provides a much larger opportunity.
Alleyne said this is the future of money worldwide, noting that in many other countries similar services have already been established and continue to be quite successful.
“In Trinidad we have the opportunity to provide these services to the local population so they now can take advantage of the ease and convenience,” Alleyne added.
In business since 2013, PayWise has facilitated the electronic transfer of cash using the National Lotteries’ (NLCB) payment system.
WiPay arrived three years later, with a much broader mandate to facilitate e-payments in a struggling local e-commerce landscape.
With the contract being terminated from NLCB, PayWise had to develop its own agent network from scratch.
Acknowledging there have been many challenges along the way, Alleyne said business, however, continues to flourish.
According to the company’s site, PayWise has three types of users; agents make payments to merchants on behalf of customers; merchants sell products and services to customers and customers pay merchants for goods and services using PayWise.
It also noted each user is assigned a unique personal identification number (PIN).
When users log in to PayWise, the PIN appears on the top left-hand side of the screen.
Alleyne who came from a traditional finance background, spent nine years in IT at Royal Bank, working with Development Finance Ltd after doing his MBA and then striking out with his own business.
And as an e-money issuer, Alleyne is also confident his customer base will expand, facilitating more customer-to-business, business-to-customer, business-to-business and person-to-person transfers.
Regarding the development of the local Fintech industry Alleyne believes the sector will grow as legislation has already been a key enabler.
The Central Bank is currently reviewing other applications for electronic money issuance in T&T.
In a July 7 statement, the bank said it has been receiving “valuable feedback from companies interested in providing Fintech services in Trinidad and Tobago.”
In detailing other conditions for the licensing of companies the Central Bank said one of the basic requirements that companies must demonstrate includes adequate capital and liquidity to cater for their proposed operations.
Additionally, the capital and liquidity required will depend on the proposed scale of operations and clientèle, to cater for potential financial risks, especially to customers, the bank said.
It noted businesses must also show a formal risk management framework.
The bank explained these details by integrating consideration of key financial and operational risks including anti-money laundering/financing of terrorism, data protection in the organisation structure and processes.
Regarding policies and procedures to ensure proper governance in conducting day-to-day operations the bank advised qualified directors and managers who implement proper work practices and business standards; this includes effective communication with customers involving avenues for dealing appropriately with complaints and for redress.
Other overall considerations by the Central Bank include the expected contribution of the activity to financial innovation and development in the country, ease of use and interoperability of the proposed activity with other financial instruments and market conditions, including the number of firms offering similar products.
Currently, the Central Bank grants licenses for payment service operators, payment service providers and electronic money issuers.
Put in a box:
BASIC REQUIREMENTS THAT COMPANIES MUST DEMONSTRATE:
1. Incorporation under the laws of T&T.
– applications can be considered from companies not yet incorporated locally but this incorporation must take place before registration is approved.
2. Financial soundness.
– evidence will include Audited Financial Statements, projected Prot and Loss Statements, Bank accounts etc.
3. Adequate capital and liquidity to cater for their proposed operations.
– the capital and liquidity required will depend on the proposed scale of operations and clientele, in order to cater for potential financial risks, especially to customers.
4. A clear and detailed business plan on the proposed products, services and client base.
– the precise product line, how it works and the safeguards, accompanied where possible by demonstrations; some presentations may be via interactive sessions with the Central Bank.
5. A formal risk management framework.
– the plan for integrating consideration of key financial and operational risks including anti-money laundering/financing of terrorism, data protection etc. in the organisation structure and processes.
6. Robust technology infrastructure that is standards based.
– information technology equipment, personnel, and framework that are state of the art, reliable and conform to industry standards.
7. Policies and procedures to ensure proper governance in conducting day to day operations.
– qualified directors and managers who implement proper work practices and business standards; this includes eeffective communication with customers involving avenues for dealing appropriately with complaints and for redress.
OTHER OVERALL CONSIDERATIONS BY THE CENTRAL BANK:
1. The expected contribution of the activity to financial innovation and development in Trinidad and Tobago.
2. Ease of use and interoperability of the proposed activity with other financial instruments.
3. Market conditions, including the amount of firmooffering similar products.