Central Bank survey reveals increasing use of digital payments

As the Central Bank of The Bahamas (CBOB), Ministry of Finance and clearing banks push to achieve a 50 percent reduction in the use of cash and an 80 percent reduction in the use of checks by 2025, a new survey revealed that more businesses have embraced digital payments in the wake of the COVID-19 pandemic.

The business digital payments survey, commissioned by the CBOB in the last quarter of last year, found that both the acceptance and use of electronic payments increased in The Bahamas during 2020.

In fact, fewer than 30 percent of Bahamian businesses still conduct important transactions using cash, with more opting to use checks for payment.

“Credit card usage for local payments (utilities and other suppliers) was slightly above the rate at which payments were made for similar transactions with checks, but still less than one fourth of the respective transactions. Credit cards offered notably higher convenience for international payments and travel (more than 1/3 of transactions),” the survey found.

“Most predominantly however, was the reliance on electronic banking to complete more than half of salary payments and in the range of half of utility payments. Indications are that about 40-50 percent of payments for both local and international suppliers of goods and services were completed via electronic banking channels.”

More businesses have also embraced the importance of having a digital presence, with about 79 percent of those surveyed indicating that they primarily use social networks for some form of marketing.

“Facebook was the most widely used platform (69.9 percent), followed by WhatsApp (59.5 percent) and Instagram (49 percent),” the Central Bank stated.

“Moreover, about 60 percent of firms were present on at least two platforms.”

As for consumers, cash remained the most commonly used payments instrument.

“A majority (51 percent) reported using cash on an ‘almost daily’ basis over the past six months leading up to the survey, with another 18 percent using cash an average of at least twice weekly and 14 percent at least once weekly. Less than four percent reported never using or not having cash,” the bank stated.

“At the same time, there appeared to be some movement away from cash vis-à-vis other payment methods, with a combined 42 percent of persons reporting decreased usage from a year earlier, relative to a combined 28 percent that increased cash usage. Meanwhile, 29 percent of persons kept their level of cash usage ‘the same’”.

Similar insights emerged on check usage. Some 20 percent of persons indicated having used personal checks over the previous six months. About 40 percent of that number reported decreased usage compared to higher usage among only nine percent of respondents and 32 percent who revealed no change.

The vast majority of consumers – 93.4 percent – who participated in the survey said they had access to some form of deposit facility, with 89 percent saying they utilized commercial banking institutions.

“Also noteworthy in the results was the significant overlap in consumer usages of deposit products offered by credit unions, alongside those availed from banks. An overwhelming majority of persons who use credit unions also maintain deposits at banks,” the CBOB stated.

“Additionally, the results show very low usage of online gambling or web shop accounts as substitutes for access to accounts at banks or credit unions. Again, the significant majority of gaming patrons also make use of banking or credit union facilities.”

Fifteen percent of respondents said they had online accounts for gambling, however 71 percent of such users indicated that such accounts were used only for gaming, with another 15 percent using it as a savings facility and only five percent using it to transfer funds to family members.

The post Central Bank survey reveals increasing use of digital payments appeared first on The Nassau Guardian.

source https://thenassauguardian.com/central-bank-survey-reveals-increasing-use-of-digital-payments/