The Bahamas Central Bank has initiated a consultation to eliminate cheques as a payment method, cooperating with banks, credit unions and other payment services providers.
Additionally, the bank plans to conduct wider consultancy with the public in order to ensure that the strategy is ‘efficient, financially inclusive and supportive of further development’ of the Bahamas economic and financial systems.
Rationalising its decision to begin phasing out cheques, the bank explained that electronic fund transfers and non-cash transactions are becoming increasingly common, stating that the strategy will be reflective of payer preferences and decisions by individuals, businesses and the government to ‘discontinue acceptance of cheques’.
This process has been accelerated by the COVID-19 pandemic – a trend which has been witnessed in multiple fiscal sectors throughout the world, as a number of countries such as Norway, Switzerland, Finland, the UK and Sweden are becoming increasingly cashless.
Furthermore, the bank believes that the fee structure for electronic payments favours non-cheque users, as the Bahamas Automated Clearing House (BACH) charges more for settlements of cheques than other transactions.
The bank also asserts that mobile wallets are posed for greater adoption’ to bring more financial inclusion and acting as ‘interoperable substitutes’ using the Sand Dollar digital currency.
“A Bahamian reduction and elimination strategy will proactively address financial inclusion and promote legitimate access to alternatives, for both individuals and businesses,” the Central Bank stated.
“The elimination strategy also proposes to provide adequate public education around the use of digital alternatives, and consider positive and consistent pricing incentive structures across the financial sector.
“Also to be tackled are residual issues around the legal clarity of settlements that are projected increasingly to be instant or faster in nature; around the finality of the process; and the recourse of payers and payees in the event of errors or fraud.”