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No love for mobile ambitions of micro bankers

Published:Friday | February 1, 2013 | 12:00 AM
This invitation, in the form of a cellphone, was sent out by JCCUL for the launch of its new e-payment service, JCUES, in March 2012. - File

Avia Collinder, Business Writer

Last year, when the Jamaica Co-operative Credit Union League (JCCUL) came up with a mobile-banking product to be deployed sectorwide, the agency got steamrolled by the central bank, which told the micro financiers that JCUES would need its imprimatur before its deployment.

JCCUL is still awaiting that approval; and its new innovation, JCUES - the Jamaica Credit Union e-Payment Services system - remains in limbo.

In the interim, the Bank of Jamaica (BOJ) has given its blessing to another mobile-banking project being developed for the microfinancing sector by the Development Bank of Jamaica (DBJ).

And while DBJ is a key partner to Jamaica's microfinancing agencies, it has opted to use Jamaica's largest commercial bank to do the pilot test.

It's all very puzzling to JCCUL, the umbrella agency for some 40 micro financiers.

"We have been told by the BOJ that they are preparing new guidelines for the payments and settlements system, so we have to await the completion of the guidelines before the process can proceed," said JCCUL General Manager Glenworth Francis.

"They issued the draft guidelines for comment by the industry. The comments were made. The final draft should have been issued two months ago, but they were not. We are still awaiting them."

Francis said he knew of the NCB pilot project when he read about it in the press.

The DBJ said its decision not to consider any other microfinancing channels turned on the instructions of the BOJ.

"The Bank of Jamaica stipulated that the banking partner for the pilot project must be a commercial bank. NCB was the first commercial bank to respond to DBJ's invitation to partner on the pilot project," DBJ told the Financial Gleaner.

The pilot programme has been in the works since at least 2010. NCB said that DBJ signed a memorandum of understanding with technology provider Transcel Limited that year and another with the banking group in 2011.

"Transcel Ltd will provide the mobile platform and related systems. NCB and DBJ will ensure that all financial transactions conform to the regulatory conditions of the Bank of Jamaica, which include KYC compliance for all pilot participants and security of transactions on the mobile platform," NCB said via email.

The deals struck with Transcel and NCB preceded JCCUL's launch of its JCUES system which was unveiled in March 2012 to provide mobile top-up, bill payment and account access for credit union users.

Developed by technology provider Mozido, phase one was to have been introduced to the market initially through the Jamaica Police, CWJ, St Catherine, Montego and Churches credit unions.

The system does not require a smartphone to access the service. Once the mobile phone is Java-enabled, accounts can be accessed.

The delay in implementation has caused some financial loss, said Francis. "The fact is we were projecting to start certainly from mid-year (2012) and we have not been able to. This has affected our income."

JCCUL spent just over US$5 million on the product's development for eventual use by a membership base of nearly one million.

The DBJ, meanwhile, posted on its website that the Mobile Money for Microfinance (M3) pilot was approved by the central bank back in June 2012. "The Bank of Jamaica, which is responsible for the health and security of the formal financial and payments systems, after reviewing the pilot project, wrote in June 2012 that it has no objection to the pilot proceeding," said DBJ.

BOJ Deputy Governor Livingstone Morrison said last August that the review of JCUES was not divorced from the retail payments system being developed by the central bank, which was a broad-based programme.

The central bank did not respond to queries on the status of the JCUES review nor the reason for its preference for a commercial bank for the M3 pilot.