Conec withdraws from mobile money market
Jamaica Co-operative Credit Union League, JCCUL, has discontinued its mobile wallet, Conec, to free up resources for deployment to more needy areas of operation, according to outgoing boss Glenworth Francis.
JCCUL operated Conec through JaMobile Payment Services. The mobile money service was first to market, having started out as JCUES in 2013. It has since been joined by Quisk from the NCB Financial Group, and GK-MPay, offered by the GraceKennedy group.
Francis notes however that Conec was not being discontinued because of rivalry, but because the market was not ready to embrace the wallet and needed more time to develop.
"It was going to take a lot of education and information, a lot of building out among clients and merchant base," he said.
"The league had to re-examine its strategic goals and the area that it had to put its resources. We had a number of areas that we felt were of greater priority than the wallet," said Francis.
Francis said JaMobile will cease operation, but most of the staff will be redeployed to other areas of JCCUL's operation.
JCUES and Conec were developed with the assistance of technology partner, Mozido LLC.
"Mozido had transferred its interest to M-Conec, which is a subsidiary. M-Conec is now just our software provider. The relationship will cease as with any other software provider. We paid license and maintenance fees."
He also said the investment in Conec, which was about US$2 million, would be written off.
Meanwhile, Francis notes that one of the more pressing areas of need is compliance, as credit union reform heads to the finish line. JCCUL currently serves as the umbrella agency for the movement, but the transition to central bank oversight is expected by next March. The 28 credit unions will have to report on their operations to the Bank of Jamaica, and will be subjected to new regulations.
"The credit union movement is going to be faced with the new Credit Union Act, for which they will have to prepare themselves," said the JCCUL manager. "There is quite a bit of expense related to the cost of compliance and regulation. For example, you have to ensure that you beef up your reporting structure."
Additionally, local credit unions also have to adjust their accounts to comply with a new IFRS accounting rule regarding the valuation of securities and loans. IFRS 9 comes on stream in 2018, but the accounts for 2017 have to be adjusted for comparative purposes.
That bill comes to $200 million, he said. Additionally, JCCUL needs to identify another $100 million, initially, to upgrade software and connectivity between credit unions.
In recent years, the credit union movement has shrunk from 40 to 28 as several institutions merged to shore up their capital base. Francis said there was one merger there was one merger this year, but that several more are in the works.