Guyana modernising payment systems – BoG official

…. cash payments to be reduced

Steps are being taken to have Guyana’s payment system modernized, so as to ensure safe, efficient, reliable, and convenient service is provided to customers by the local banking industry.

According to Bank of Guyana Manager (Accounting and Budgetary), Leslie Glen, bank notes and coins are now widely used for payment purposes.

He said that since 1997, Guyana, through the Central Bank, embarked on a modernisation of the payment system with the hope of reducing cash payments.

“Guyana’s payment system is relatively underdeveloped. Guyana is essentially a cash-oriented society,” he said.

To assist Guyana in its bid to have a transformed payment system through exploring the future of payment processing, McEnearney Business Machines (MBM), a subsidiary of ANSA McAL, hosted a one-day seminar with members from the banking industry, the Finance Ministry, and major entities such as the Guyana Revenue Authority (GRA) and the Guyana Telephone and Telegraph Company (GT&T).

“In my opinion, this seminar is a very timely initiative, and one which supports the bank’s strategic vision as it relates to payment processing,” Glen said.

He continued: “While the use of high-value cheques is growing in popularity – 91 per cent growth from 2010 to now – the growth of overall use of cheques, both high and low value, has exhibited some evidence of retardation over the last decade.” Further, the total number of cheques processed in the national clearing house fell marginally, from Gy$ 1.2 million in 2000 to Gy$1.1 million in 2010, Glen added. “It is important, and there is an urgent need for Guyana to develop a payment system in which the monetary transfer of value is safe, efficient, convenient and reliable,” Glen said.

This is where cheque truncation comes in. Cheque truncation is the conversion of a cheque into electronic format to the paying bank.

And Glen believes that customers and large-base companies such as GPL, GT& T and NIS stand to benefit significantly from the use of electronic cheques.

Cheque truncation is beneficial in many ways, as it minimises the cost of processing a physical cheque; reduces the clearing cycle of a cheque, which means faster access to cash; reduces the courier cost; and enhances the early detection of fraud, among other benefits.

Should the Bank of Guyana become a profitable institution, then “any development that supports the move from cash to non-cash contributes towards improved profitability. This is especially important for the expansion of Guyana’s financing industry, Glen stated.

The workshop, which was held at the Pegasus Hotel, featured representatives from Aperta conducting sessions on the benefits of truncation and image exchange, its impact on businesses, among other issues.

Aperta is one of the leading providers of secure payment processing solutions to financial and commercial institutions worldwide. It also provides extensive consultancy and technical and project management skills, as well as a range of flexible, stable and powerful application components designed for the processing of payments and financial transactions.