Three more banks preparing wallets for Jam-Dex

Weeks after the Senate officially passed legislation to enable the full roll-out of Jamaica’s digital currency Jam-Dex as legal tender, another three banks have stated their intention to move swiftly on the launch of digital wallets to facilitate transactions via mobile devices.

JMMB Bank and JN Bank have both set timelines between December 2022 and April 2023 to have their mobile payment solutions rolled out, while First Global Bank, FGB, the banking subsidiary of the GraceKennedy Group, has plans to incorporate CBDC-related services in the GKOne mobile app in the near future but has not yet established a timeline for roll-out.

They will join first-mover National Commercial Bank Jamaica, which was the only bank to participate in the Bank of Jamaica’s pilot test of the central bank digital currency or CBDC through its NCB Lynk wallet and the only bank said to be able to facilitate Jam-Dex transactions for now.

Today, the NCB platform has little over 100,000 ‘Lynkies’, or users, who can conduct peer-to-peer transfers; conduct digital payments with over 2,000 merchants predominantly in the food and beverage, fashion, and consumer goods categories; as well as top-up their mobile devices with credit on local telecoms networks.

Over the next few months, Lynk will be adding a digital bill payment feature to the platform and will soon shift our focus to onboarding small, medium, and large merchants, another way NCB hopes to keep the interest of existing users while attracting new ones.

The numbers indicate that interest among individuals in digital transactions had spiked, mainly due to promotional offers.

Up to December 2021 when the CBDC was still in its testing phase, the central bank had reported that NCB onboarded 57 customers, including four small merchants and 53 consumers. Applications for the platform had over time improved on promotional activities by NCB, including a bonus payment of $500 for early adopters, and additional payments of $250 for every friend or family member that the account holder refers to download the Lynk App and create an active account.

However, users of the mobile wallet ballooned on the Government’s announcement that it would offer an incentive payment of $2,500 to the first 100,000 people who sign up for the digital currency wallet.

But in less than a month, the buzz around Jam-Dex has been slowly fading. Still, NCB is working to keep the momentum going with its promotional activities.

“There was a healthy interest in Lynk even prior to the Jam-Dex announcement, and though we saw an uptick after the announcement, we have seen sustained interest due to the addition of our other new features like our mobile top-up. Also, with our new ‘mek di Lynk’ islandwide tour, we aim to further educate potential users and drive further acquisition,” Brand and Communications Manager for Lynk, Kemoi Burke, told the Financial Gleaner.

Bank of Jamaica expects usage of Jam-Dex to be low at the start but is hoping that more persons will opt for the convenience of doing transactions via their Jam-Dex wallets over physical cash, which is costly for the central bank to manage.

First Global, the second smallest of Jamaica’s banks, said via email that a comprehensive customer-acquisition plan has been developed for its upcoming mobile wallet, which involves both in-person and digital marketing of the GKOne app through First Global Bank, the Western Union franchise, Bill Express, and several other GK businesses.

“We will also offer incentives to customers for sign-up and usage,” the bank said, adding that it projects that growth of the GKOne mobile app would be directly linked to the value that the app will offer to consumers, which includes a ‘free’ local/international Visa pre-paid debit card, receipt of remittances on the Visa card in real time, payment of utility and other bills, and credit card application.

“Following launch of the app, we expect the number of users to double on an annual basis as new features are added,” the bank said.

Meanwhile, JN Bank says it will leverage the strength of the Jamaica National Group to provide its users with a “seamless solution” and will also provide customers with access to complementary or discounted services offered by the group.

“The solution will feature peer-to-peer transactions, bill payments, and phone credit top-up. Cash in and cash out via Smart ATMs, and JN Bank accounts will also be available. The wallet will only facilitate Jamaican dollar transactions,” JN Bank said.

Since the success of the mobile wallet is heavily dependent on digital trades being free, the banks have been exploring creative ways to recoup cash spent on developing the app and marketing activities in building out the digital ecosystem.

NCB’s Burke told the Financial Gleaner that the majority of its earnings will come from agreements with merchants or service providers regarding fees to use the business side of the platform, while JN Bank is exploring cross-selling financial services, including credit solutions, such as mortgages and small business loans on its upcoming app.

At First Global, the bank expects revenue growth to be generated by an uptick in the use of the digital products offered in the app, coupled with lower overheads, as it scales and delivers these services to a larger customer base.

“FGB will benefit from the additional customers who will be able to sign up for our credit cards via the app,” it said.

karena.bennett@gleanerjm.com