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BOJ to regulate bill payment companies - Costs likely to rise

Published:Friday | January 25, 2013 | 12:00 AM

Avia Collinder, Business Writer

Fifteen years after Audrey Marks pioneered the service, the Bank of Jamaica (BOJ) has decided to add bill-payment companies to its list of regulated entities.

The market has three registered players - Marks' Paymaster Jamaica; GraceKennedy's Bill Express; and the newest entrant Quick&EZ Pay, operated by Prime Trust Financial Limited - which together operate some 321 payment windows nationwide.

BOJ confirmed this week that the companies will begin the reporting of data to the central bank, covering bill-payment services dating back to August 2012 and onwards.

It cited the new policy on the national payments system, which gives the central bank supervisory responsibility for banks and other financial institutions that settle payments among themselves, both on behalf of customers and for their own account.

"In this regard, the national payment system represents the core component of the broader financial system and is widely regarded as the infrastructure that provides the economy with the channels for processing domestic and international payments resulting from financial and non-financial transactions that take place on a daily basis," the BOJ said.

Its oversight authority is covered under the Payment Clearing and Settlement Act 2010.

Don Wehby, group chief executive officer of Grace-Kennedy Limited, indicated that the move by the central bank was not unexpected, saying the BOJ in recent times has expanded its regulatory net to include money-services businesses.

In addition to deposit-taking institutions, the BOJ also regulates foreign-exchange traders and remittance companies.

"Given GraceKennedy's experience in these industries, we should not see any significant impact on our business operations at this time," Wehby told the Financial Gleaner.

"However, we are cautious as we do foresee possible costs for licensing and compliance."

Victor Chang, a director of Prime Trust Financial, said a J$25 charge per bill paid through Quick&EZ was related to the regulatory requirements of the BOJ, among other factors.

Previously, the service was offered free alongside Prime Trust's cambio and remittance services. Chang also said the new compliance rules means it has to do tight monitoring of partner retailers who also have to be approved by the central bank.

"The bill-payment industry is a regulated industry overseen by the Bank of Jamaica effective August 1, 2012. We now need to submit information. What we can say is that collections through bill payment is in the billions. The JPS (Jamaica Public Service) and NWC (National Water Commission) constitute 97-98 per cent of entire payments," Chang stated.

The BOJ said the first set of data is due to be reported six months after the new regime took effect.

"The year-to-date statistics are not yet available. Data for December 2012 is currently being submitted, as providers have up to the middle of the following month to submit the previous month's data," said the central bank.

"A complete report would not be available before January 31, 2013, which is the reporting cycle."

Wehby, in the meantime, says his company "welcomes regulation aimed at ensuring our financial payment industry remains compliant".