Finance experts: More education needed on e-money

E-money, going cashless and digital currency have all become buzzwords over the past few years, with both the public and private sectors making significant strides to enable Trinidad and Tobago to benefit from the evolving e-money ecosystem.

In the public sector, the government has legislated the use of digital currency and transactions through the Electric Money Issuer Order, which allowed institutions outside of the banking system to be able to hold money and allow transactions digitally.

Companies such as Pesh Money, PayWise and TSTT’s Paypr were established to facilitate digital transactions, opening the way for people of all walks of life to access and conduct financial transactions in the digital space.

“The idea was to use these e-money issuers and, hopefully, it would be a mechanism to allow people in rural communities. Even people who have an apprehension of the banking system can go to an agent and they could put some into their wallet and they could transact digitally,” said the Institute of Chartered Accountants of TT (ICATT) CEO John Outridge during a panel discussion on e-money, at the Annual International Finance and Accounting Conference at the Hyatt from November 21 -22.

The panel discussion looked at the pros, cons, parameters and considerations for an effective e-money system.

But adoption hit an early snag, as there was a lack of trust in these systems, as well as a lack of knowledge of how to use them.

The panel, which included Outridge; Andrea Ragoo, CEO and founder of Your Virtual CFO, which helps small businesses manage its finances and forensic accounting and audit practitioner Stephon Grey, said more education is needed for better adoption of e-money platforms.

Teaching digital dollars and sense

Outridge said, coming out of a survey, ICATT saw three points that it planned to focus on, the most important of which was to teach people about e-money apps, digital payments and how to use them.

The financial inclusion survey revealed that nearly 60 per cent of the population was not aware of or did not know how to use the apps, and were very apprehensive of the apps and its security.

He added that there wasn’t enough acceptance of digital currency among SMEs, which operates largely in the retail sector and that the lion’s share of transactions in TT are done in cash.

“So, what we are doing right now is rolling out a large public education campaign,” he said. “It is a very huge challenge. In TT a lot of things come down to consumer awareness and adoption.”

He said the campaign included workshops with the differently-abled and collaboration with different institutions, focusing on key groups.

“For example, Republic Bank just launched its complete 100 per cent online portal. To open an account you don’t need to visit a branch. We are holding a session with youths,” he said. “You kind of have to start in different places.”

Ragoo said the the e-money ecosystem may seem daunting to some, because it is something they are not familiar with. She made the point that this is not limited to customers and adoption of the e-money options, but includes businesses who are not familiar with compliance requirements.

“I think the first step is bringing a level of familiarity to yourself and your business, bringing compliance experts into your business, then what you want to do is also educate your customers and stakeholders.

“This whole thing about compliance is not just you alone. For you to be compliant your participants need to be compliant as well. So, an educated stakeholder is someone who is more likely to be compliant and understand why you are asking for these things.

The e-money benefits

Ragoo said there were many benefits to adopting e-money options in personal life and in a business.

“You have benefits in efficiency, you have benefits in compliance and in accessing new markets.”

She said e-money options help businesses streamline processes, reduces costs and widens a business’ customer base.

“As you know, what technology does is remove the manual interface of things. So, straight off the bat, by introducing an e-money platform you will bring automation into your system. That brings a level of accuracy in your overall processes.

“When you remove cash from the equation you can actually see some cost reduction in the handling of cash. When you manage cash in a business you have very practical costs such as security, insurance etc. So, immediately if you bring e-money platforms into your business you can see some of those costs go down.”

She said bringing more efficiency into a business would mean that someone could handle their customers better.

“They no longer have to go to an ATM to withdraw money to pay you,” she said. “If businesses adopt e-money, they are making a better experience for their customers.”

She added that it would also give access to new markets. She said products that are online require digital transactions, so, an e-money platform could mean that a business can access customers outside of TT.