There’s a video of a young Caribbean woman that made the rounds last week. I found it funny, encouraging to a point, but sad. Her loyalty to her life partner was on display as she tried to crowdsource bail money for her beloved “Joker”. His bail was set at $3,000, in whichever currency she was speaking of. She wanted to raise the amount from qualified persons but promised $200—all she had to her name—in return for their help. All the usual assurances were made to pacify what she thought were their main concerns. Little did she realise that people could see right through her plea. It made sense to her but certainly made no sense to anyone else.
I literally saw this video moments before tuning into the Central Bank of Barbados’ “BiMPay One-Month Update Press Conference”. Suffice it to say, I was left feeling no differently about the press conference than I did about the young lady. No one likes being gaslit or taken for a fool, to put it mildly. I, therefore, regret to inform you all that, for the first time ever, I am no longer speaking as the economist—the public persona—you’ve come to know. This is the Jeremy his loved ones know, speaking to you: the one who absolutely abhors asininity and loves to use alliteration to make his point.
Many of you gnashed your teeth for all manner of reasons on social media during and after this press conference. I can empathise with a substantial part of the public’s reasoning against the implementation of BiMPay, or “BinPay” (as I’ve seriously taken to calling it recently). I believe that those responsible should strip it back a bit and, as I’ve written before, run parallel systems while systematically bringing the financial system on board. Our central bank seemingly thinks this way where its app is concerned. As of today, Sagicor Bank is still the sole institution that can accept new accounts on it. This initiative was meant to bring the underbanked into the instant payments system, amongst other seemingly noble intentions.
While I believe the system is well-coded, the remaining issues continue to stem from unilateral stakeholder involvement. In other words, it is becoming clear to me that the Central Bank of Barbados bellowed and beseeched the banks to bow before they were bestirred (ready). The overarching narrative pushed by the central bank is, once again, that the financial sector (i.e. commercial banks and credit unions) had ample time to prepare for the revised launch date of the national instant payments system. To paraphrase, private-sector banking stakeholders had long been correcting erroneous payment information, or transaction metadata, in their back offices and back ends.
This process was, therefore, a routine part of their internal cultures. Telling me that the salary delays, amongst other issues, are principally the fault of “the banks” is no different from the young lady begging for bail money. They must want me to feel short-changed, all puns intended. I can, however, agree that it seems “the banks” refused to encourage individual and business clients to enter that information in an approved manner. I won’t dispute that as a fact. Of course, this meant inherent delays in settling such transactions. These were well masked by the fact that payments between banks were never instant to begin with.
Now let’s assume that the banks were being spiteful and had no intention of upgrading their technology stacks or internal processes. Let’s dream of a situation in which this was a deliberate deed, done to cause distress to the Central Bank of Barbados and disturb Barbadians. The fact that those provisions were necessary in the first place speaks to a weakness not just in private-sector systems but also in the regulatory framework of the lender of last resort. A prudent regulator and facilitator of payments would, over time, have regulated this key issue out of the system—or at least reduced its incidence to a level permitted by acceptable international standards.
On the point of standards, the Governor really got under my skin when he rehashed the claim that there were minimal losses on the system. I believe the figure given was that only 0.2 per cent of transactions had encountered payment timeouts at the institutional layer since BiMPay’s launch. Essentially, there is a 0.2 per cent chance that transactions will not be completed. This statistic in no way measures attempts to defraud the system. It is, therefore, a very serious cause for concern in a “production-ready” technology system, particularly one meant to serve a country’s financial sector. These systems are meant to be flawless because such failures undermine general confidence in them. This statistic does not tell me the real financial losses suffered by people and businesses who probably missed critically timed payments. I would truly love to know what the externalities are and how far downstream the damage can go.
But I do not forget that the pleas to slow down and allow a feasible testing period were largely ignored. Barbados is a small, fickle economy, and there aren’t many worse things you can do to a Barbadian than delay salary payments. I’ve personally seen, and continue to see, businesses lose prime customers because of reputational damage stemming from deliberate, repeated attempts to withhold salaries.
A funny story comes to mind. I heard, through an associate, of a case in which these timeouts benefited someone. He told me about a formerly married colleague who, because of a recent series of timeouts, became aware of a monthly standing order for a marginal sum paid to his ex-wife. She had apparently set it up shortly before their separation and divorce. Putting aside the disputable mechanics and the second-hand recounting of events, we can at least say that BiMPay’s untimely launch has led to one major innovation for the time being. This actually makes sense to me.