MultiLink a near $100b network
Edmundo Jenez, managing director of JETS Limited, the company that manages the MultiLink network and operates the Automated Clearing House (ACH) system, says transactions fees remain relatively cheap for Jamaicans, even as its owners pump massive capital into the system.
The network, which is owned by local banks, handles close to $100 billion of transactions per year.
"We have invested $160 million to date and when you put that together with investment made by each owner, the total cost runs into billions," said Jenez last Friday.
"In spite of this, what the end user pays for 24-hour access is a minimal charge compared to that paid in the United States."
MultiLink owners, he said, have invested
in the deployment of 774 automated teller machines (ATMs), of which 668 were active up to September. Point-of-sale terminals top 30,000, of which over 10,000 were active on the network.
"Through collaboration with competing organisations we have built a better service and everybody has benefited. We have achieved fantastic control on cost. We have been able to offer services, which in other jurisdictions cost far more than what we charge," said Jenez.
"Just compare - look at what an ATM withdrawal costs in the States versus Jamaica."
A new bank-rate survey of the 10 largest banks and 25 other institutions quoted ATM fees as ranging from a low of US$3.75 to a high of US$4.96 per transaction.
Charges in Jamaica do not exceed $100 (89 US cents), on average.
JETS, a 17-year-old company which started out as a two-man operation in shared space in 1997, now manages a system through which $8 billion of transactions flow monthly, or $96 billion annually. The ACH clears $1.2 trillion of transactions each year, said Jenez.
MultiLink has seven shareholders - National Commercial Bank Jamaica; Scotiabank Jamaica; Sagicor Bank Jamaica, replacing RBC Royal Bank Jamaica, whose operations it acquired this year; CIBC FirstCaribbean Jamaica; Jamaica National Building Society; Victoria Mutual Building Society; and the Jamaica Co-operative Credit Union League.
The network also has three licensees - First Global Bank; Capital and Credit Merchant Bank, now operating as JMMB Merchant Bank; and Sagicor PCB, formerly PanCaribbeanBank.
Jenez spoke with Sunday Business a day after JETS had hosted a seminar for small businesses in Kingston.
"We started out as a small company in debt Ö that business has grown," he told the forum last Thursday.
"The things is this: we were entrepreneurial. And more than that we achieved collaborations. It is something we would like to see happening here; all businesses working together to develop a bigger pie."
Most of his company's revenue comes from ATM usage.
During September, he said, the system recorded 914,000 individual transactions via ATMs and 480,000 through points of sale, cards in active usage numbered 380,000 out of the 1.02 million cards in circulation.
The banks charge different fees for MultiLink transactions but all owners of the network pay the same flat service fee to JETS.
"The [card] issuer sets the fee to customers. There is no surcharge [by JETS] as practised elsewhere. Some issuers absorb network costs, some pass on these costs, while some pass on and add a markup," said Jenez.
ATM charges are cheaper in Jamaica due to "creative design" of the network.
"We took advantage of economies of scale. We brought all of the separate units, connected them as one. The customer of each institution became the customer of every other institution," he said.
"Before that, a single terminal, which was serving its own clients, is now able to serve many more customers just by allowing that connectivity."