JCUES Mobile Money brings Cashless Society to the Unbanked as NCB debuts Cheque munching ATM Machine

NCB seems to want it all, I’m afraid. They now have in minds plans to roll out money and cheque reading machines in a bid to improve their ATM (Automated Teller Machines) Service later in the Fourth Quarter of 2013 to reduce the cost of running their Banks.

This is a move I welcome, along with the coming Tsunami of Mobile Money with the partnership of Mozido Jamaica and JCCUL (Jamaica Co-Operative Credit Union League) finally getting the green light from the BOJ (Bank of Jamaica) as it means the Banking Sector is getting hip to the new reality: Banks need to be user Friendly and convenient to attract the Unbanked.

The BOJ was initially in opposition to JCUES (Jamaica Credit Union e-Payment Services), the Mobile Money Service that would have made the Credit Union Partnership mentioned above the first Mobile Money Provider in the Caribbean in June 2012. Mobile Money Banking is a Service where your Debit or Credit Card is basically replaced by:

  1. A JCUES NFC (Near Field Communication) Sticker placed on your feature phone

  2. NFC enabled Smartphone with a JCUES App you download and install to enable the Service

  3. Feature phone or Smartphone with Bluetooth, no App Required

  4. Camera phone with QR Code Reader to receive Money

You can then withdraw the Money, be it from your own account or when receiving Remittances via your Credit Union Account or JCUES Account at a Retail Payment Service Providers or spend it via using Mobile Money without ever having to handle cash.

Wherever there is an NFC Reader or another Smartphone with a JCUES Account and NFC Reader capability, you can spend Money with them. You can also withdraw Cash from a Retail Payment Service Providers by simply using your phone to verify your Account number and the Agent will pay you the Money you requested.

Very similar to withdrawing Money from ScotiaBank or JNBS (Jamaica National Building Society), both of whom have eliminated the need to carry a Bank Book to the Bank to withdraw Cash. Deposits via a Retail Payment Service Providers work the same way too using your feature phone or Smartphone. But it’s sending Money across the island where the convenience comes in.

I’m sure many a time, your confronted with a situation where you are asked to send someone Money and that persons is on the other side of Jamaica, has no bank account and worse it’s on a Saturday or Sunday.  Several creative options exist:

  1. Use Mobile or Internet Banking on your Blackberry or Smartphone to transfer them Money to someone you know who has a Bank Account

  2. Going to an ATM (Automated Teller Machine) and depositing the Money via placing it in an Envelope

  3. Sending a Money order via your Remittance Service, which means the person has to go to a Remittance Service Provider who may/may not be open

So add Mobile Money Service to that list. Here’s how it would work, which is a lot like Credit U:

  1. You’d send a SMS (Short Messaging Service) text composed using special USSD (Unstructured Supplementary Service) codes that may be similar to those used in Digicel CreditU to a pre-assigned Gateway number for JCUES e.g. 4447777

  2. The sender then receives a confirmation text from the JCUES Gateway Number with a special unique transaction code and confirmation that the Money has been sent

  3. The recipient then receives an SMS with a confirmation text from the JCUES Gateway Number with a special unique transaction code and confirmation that they have received Money from the sender

  4. The recipient then takes the feature phone with the code or write off the code and carry your GOJ ID to a JCUES Retail Payment Service Providers and you’re given the Cash

  5. If you have your feature phone and it has a JCUES NFC sticker or a Smartphone with the JCUES NFC App and is NFC capable, you can use it to withdraw the Money by swiping it at the Retail Payment Service Providers NFC Reader and get Cash

  6. If JCUES is enabled on an ATM via Multilink and you have your feature phone and it has a NFC sticker or a Smartphone with the NFC App and is NFC capable, you can use it to withdraw the Money by swiping it at the ATM’s NFC Reader and get Cash

The BOJ had put the kibosh on JCUES, claiming it would have resulted in Money Laundering and Scamming, which is technically true, as it would allow unfettered Transfers of Foreign Exchange from the US into Jamaica with little or no regulation. BOJ won’t allow them to do business unless they:

  1. Partner with a Local Bank that fill accredited and registered with the BOJ

  2. Comply with the regulations set by the BOJ to regulate Mobile Money

  3. Ensure that all Mobile users are have their Mobile Phones be Postpaid or Registered with their Telecom Provider using a Government ID

  4. Use the person’s Mobile Number, SIM (Subscriber Identification Module), IMSI (International Mobile Subscriber Identification) for the SIM and IMEI (International Mobile Equipment Identification) for the Mobile Phone to fully register and identify the customer, necessitating that the Mobile Money Provider also partner with a Local Telecom Provider

  5. Telecom Providers have to have a means of securely locking down Mobile phone and their associated Bank accounts in case the Mobile phone is stolen. This may require that Telecom Provider provide tracking Services for Smartphone users or Smartphone users get a Tracking App from the Mobile Money Provider

Then the BOJ finally announced some ground rules in April 2013:

  1. All entities intending to offer Electronic Retail Payment Services are subject to the guidelines

  2. All entities intending to offer Electronic Retail Payment Services are required to apply to the central bank for authorisation before starting operations.

  3. All entities intending to offer Electronic Retail Payment Services are required to maintain sufficient capital to support a minimum net worth of US$100,000 or the equivalent in Jamaican dollars, subject to any changes that the bank shall make from time to time, according to the BOJ.

  4. All Retail Payment Service Providers are required to pay US$5,000 ($461,000) authorisation fees for the initial application for an electronic retail payment Services License

  5. All Retail Payment Service Providers are required to pay US$4,500 for renewals for their electronic retail payment Services License.

  6. Agents of the Electronic Retail Payment Services that franchise their Services to Retail payment Service providers are required to pay US$200 for both initial applications and renewal.

At this point a few definitions are in order, dear Reader:

  1. Mobile Banking – implies transactions done over the Internet via either a Smartphone, Blackberry of a Computer, be it a Laptop or computer.

  2. Electronic Retail Payment Services – this is the name given to the Bank, Credit Unions or other entities that’ provider these e-payment or Mobile Money Services.

  3. Retail Payment Service Providers – this is the name given to the companies, Wholesalers and Retailers, Supermarkets, small Businesses, etc. who’ve signed up to accept Transactions via Mobile Money. Effectively equivalent to ownership of a POS (Point of Sale) Rental for NCB (National Commercial Bank) or Scotia Bank.

  4. Agents – representatives of the Electronic Retail Payment Services who have to have certification in Accounting and money management and be license to act on behalf of the Electronic Retail Payment Services. Basically akin to Insurance Agents

Also in the ten (10) months, the BOJ Regulation means that competition had caught wind of the potential of Mobile Money Services to tap into. One of the biggest potential competitors is GraceKennedy, who by the way handle nearly 50% of all Remittances in Jamaica  and have expressed an interest in entering the Mobile Money Market since May 22nd 2013.

Supreme Ventures has also taken an interest, especially as it might allow them to expand their Lotto Games Services to Smartphone users, mostly Millennials (ages 18 to 28) who have taken to Smartphones as noted in Apple iPhone boosts Jamaican Smartphone usage as BB goes Chapter 11 Bankruptcy , a rapidly expanding market ripe for Mobile Money!

Some more experienced Veterans are also lining up to take a slice of the Remittance pie from JCUL and Mozido Jamaica Limited Partnership:

  1. Advanced Integrated Systems (AIS) of Kingston and US-based MOBIbucks

  2. BPO (Business Process Outsourcing) entrepreneur Jamaican, Patrick Casserly via his Florida based company eMagination Ltd in partnership with PayToo Mobile Wallet

Already some even younger entrepreneurs in the guise of co-founders Jason Scott, Kevin Leyow, and Jonathan Cooper have started Blaze Payment under the guidance of Tech Incubator GeeWax, most likely geared at Party Ticketing and Prepaid Credit Sales, another area of business this fledgling startup can target.

Especially as Remittances have been on the uptick since April 2012 and the unbanked (peeps with no Bank Accounts) are mainly recipients of Remittances from abroad. Director of the Centre of Excellence of the Mona School of Business, Dr Maurice McNaughton back in 2011 estimated the size of the Unbanked as follows:

  1. 34% of Jamaicans above 18 years do not own Bank accounts

  2. 66% of Jamaicans above 18 years own Bank accounts

  3. 12% of Jamaicans above 18 years who own Bank accounts have Debit Cards attached and use them actively for Transactions

  4. 80% adult Jamaicans have limited access to low-cost, efficient and user-friendly Banking Services

Thus the BOJ’s approval is not just about approving a new Service or just simply making Banking more user-Friendly. It’s about creating a new Tax Revenue stream from persons in Society who traditionally receive Remittances as their sole income but may not be taxed. Via the new Mobile Money Regulations that enable a Cashless society in Jamaica similar to that which exists in Sweden, this would allow for such persons to pay Income Tax by making their Remittances banked and thus establish a paper trail for the purpose of Taxation.

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Lindsworth is a Radio Frequency and Generator Maintenance Technician who has a knack for writing about his work, which is in the Telecoms Engineering Field. An inspired writer on themes as diverse as Autonomous Ants simulations, Power from Lightning and the current Tablet Wars.