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  • This is to facilitate the entities’ designation under the Proceeds of Crime Act (POCA), Deputy Governor in charge of Market Operations and Currency, Natalie Haynes, has said.
  • Additionally, Mr. Byles said that in establishing the Sandbox, the BOJ has joined its regulatory counterparts globally, “in seeking to understand the opportunities that can be presented by financial technology, particularly in the delivery of payment services and consumer protection.”
  • “We view the Sandbox as one of the tools which is helping to respond to the advances in the market where the regulatory paradigm may not move as quickly. The OUR is keen to support the development of innovative products through cooperation with, and participation of the telecommunications sector,” Mr. Hewitt said.

The Bank of Jamaica (BOJ) has commenced work to develop an enabling framework for the regulation of Payment Service Providers (PSPs).

This is to facilitate the entities’ designation under the Proceeds of Crime Act (POCA), Deputy Governor in charge of Market Operations and Currency, Natalie Haynes, has said.

She was speaking at a BOJ virtual press conference on Thursday (May 7), to provide an update on the Central Bank’s recently announced Fintech Regulatory Sandbox.

Mrs. Haynes said development of the new framework results from the BOJ’s withdrawal of the Guidelines for Electronic Retail Payment Services (ERPS 2 Guidelines), in February 2019.

She pointed out that these guidelines, which were implemented in February 2013, were updated in November 2018.

“The reason for this [withdrawal] was that the EPRS 2 Guidelines were not underpinned by a comprehensive legislative and regulatory framework for overseeing and enforcing specific activities of payment service providers,” the Deputy Governor explained.

Mrs. Haynes noted, however, that three entities with products already authorised under the former ERPS Guidelines continue to operate in the retail payment system.

She said the BOJ’s 2019 annual report show that the entities contributed to the 134.5 million electronic retail payment transactions valued $4.03 billion, which were facilitated that year.

Mrs. Haynes informed that of this number, the entities accounted for 5.61 million transactions representing 4.2 per cent of the overall total, adding that these amounted to $11.69 billion or 0.3 per cent of the cumulative value.

Additionally, she said of the 203,390 accounts generated by the entities, only 135,228 were active at the end of 2019. 

The Deputy Governor said in a bid to encourage innovation and provide PSPs with an opportunity to test financial products and services delivered across technology platforms (Fintech), the BoJ launched the Fintech Regulatory Sandbox.

The facility provides a platform that encourages innovations in financial services, and a controlled environment for testing and deploying technology to deliver those provisions, inclusive of prepaid cards.

Applicants eligible to enter the sandbox are regulated entities including: deposit-taking institutions (DTIs); cambios; remittance service providers; securities dealers who have been authorised by the Financial Services Commission (FSC) to participate; and fintech companies partnering with DTIs.

Mrs. Haynes advised that as at April 27, the Central Bank had received applications from four entities seeking to participate in the Sandbox.

The Deputy Governor further informed that the Central Bank has also received queries, inclusive of two from entities seeking to offer both mobile wallets and prepaid card products.

She noted, however, that the BoJ is yet to receive a complete application that meets all the Sandbox’s requirements, adding that the entities are making the necessary amendments for resubmission.

Mrs. Haynes advised that the Sandbox’s guidelines and entry requirements have been published on the Central Bank’s website – www.boj.org.jm – adding that applications should be sent to fintech-sandbox@boj.org.jm.

Meanwhile, BOJ Governor, Richard Byles, said the establishment of the Sandbox is consistent with the Bank’s commitment to develop a modern financial sector.

Bank of Jamaica Governor, Richard Byles.

 

“The timing of the launch… could not be more fortuitous, as Jamaica continues to adjust in its response to the Coronavirus (COVID-19). We must find new methods of delivering financial services, which are efficient and safe for all consumers,” he said.

Additionally, Mr. Byles said that in establishing the Sandbox, the BOJ has joined its regulatory counterparts globally, “in seeking to understand the opportunities that can be presented by financial technology, particularly in the delivery of payment services and consumer protection.”

Meanwhile, Director General of the Office of Utilities Regulation (OUR), Ansord Hewitt, has endorsed the Sandbox.

The BOJ and OUR have forged a Memorandum of Understanding (MOU) that will facilitate the sharing of information to enable the regulation and monitoring of telecommunications operators participating in the provision of financial services.

“We view the Sandbox as one of the tools which is helping to respond to the advances in the market where the regulatory paradigm may not move as quickly. The OUR is keen to support the development of innovative products through cooperation with, and participation of the telecommunications sector,” Mr. Hewitt said.

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