Mon | Dec 17, 2018

PATH opens up for mobile money market

Published:Wednesday | November 21, 2018 | 12:00 AMAvia Collinder/Business Reporter
The JCUES epayment service app, later rebranded as Conec mobile wallet, is displayed in this 2014 file photo. The Jamaican government is gearing to distribute social welfare benefits through mobile money platforms.

The long-anticipated move by the Government of Jamaica to shift some of its payments to a mobile money platform made headway this week with the invitation for expressions of interest for payment portals for the Programme of Advancement Through Health and Education (PATH).

The Ministry of Labour and Social Security is advertising for service providers to undertake electronic/automatic payments on a bimonthly basis to 128,000 families that are beneficiaries of the welfare programme.

The importance of the step taken, experts have told the Financial Gleaner, is not necessarily earnings from the project, but the critical mass of users that it will create and the momentum created in the mobile-money ecosystem in Jamaica.

Companies operating mobile-money payment systems in Jamaica include GraceKennedy with GK MPay, National Commercial Bank with Quisk, Sagicor with MyCash, and M-Conec with Conec.

To date, both consumers and merchants have been hesitant to enrol, putting the viability of the mobile-money market in question and leading to one casualty, but the addition of 128,000 regular users is expected to inject energy into the arena of electronic payments by phone. The umbrella credit union, JCCUL, which exited its partnership with Conec after losses, was a pioneer in the mobile money market and was the first to publicly call for the State to utilise the platforms for cash distributions.

Now that call is finally being heeded. The labour ministry said that by choosing to go mobile with the cash grants, it aimed to promote financial inclusion, improve administrative efficiency, reduce costs and ensure greater accessibility, including its rural beneficiaries.

Bids are to be submitted by November 30.

The winning bidder must demonstrate a capacity to transmit funds to recipients immediately on receipt, and offer 24-hour customer service. The provider will not be allowed to impose transaction fees on beneficiaries.

Earlier this year, Heston Hutton, a financial adviser who was engaged in the launch of Jamaica's first mobile money product, JCUES, later rebranded as mobile wallet Conec, said mobile money adoption would continue at a snail's pace unless the Government intervened to create critical mass.

His rationale was that merchants would be more willing to accommodate purchases through mobile wallets once they were assured that those wallets were being consistently topped up and in use by masses of people. He also theorised that persons would acculturate to the product once the issue of choice was removed.

avia.collinder@gleanerjm.com