The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas is “barely scratching the surface” of the Sand Dollar’s potential, payment providers asserted yesterday, with the digital currency needing more “high traffic” merchants to accept it to drive adoption.

Jeffrey Beckles, Island Pay’s managing director, speaking as the Central Bank issued a progress update on the Sand Dollar’s roll-out, told Tribune Business that increasing the number of businesses willing to accept the Bahamian dollar as a means of payment will help to drive consumer confidence and increased usage.

“At present, just over 100,000 mobile phone-based wallet accounts exist in The Bahamas, and collectively over 1,500 businesses have access to merchant services through Central Bank licensed payment services providers,” the regulator said on the state of digital payments adoption to-date.

“Along with further initialised presence in the Family Islands, this is the ecosystem in which outreach, specific to Sand Dollar, is intensifying over the remainder of 2023. Within this ecosystem, spending, in both Sand Dollars and other tokens, remains low when compared to the overall size of the domestic payments system.”

Mr Beckles told this newspaper that it was critical to increase the number of merchants embracing Sand Dollars as a means to settle transactions beyond the present 1,500 given that there were some 50,000 Business Licence applications submitted this year. The Sand Dollar is the Central Bank-backed digital currency (CBDC), and is the equivalent of its fiat or hard currency counterpart. It is not a crypto currency such as Bitcoin.

Describing the Central Bank’s report as “a positive move”, the Island Pay chief said: “Some of the highlights are with regard to merchant on-boarding, which is critical if we’re going to have a real expansion and adoption of the Sand Dollar. Merchants are a large part of that. We’ve got 22,000 businesses. We’re barely scratching the surface with 1,500 but it’s a start.

“We have 100,000-plus wallets that are active in The Bahamas, which is equivalent to close to half the working population. That’s good. Because there are not a lot of merchants accepting Sand Dollar, using Sand Dollar is at a very low pace. The more we get merchants on board gives the consumer a lot more flexibility and utility. At the end of the day, the Sand Dollar is as much for the common man as it is for the middle class and the rich. It’s a one-size fits all solution.”

Data released by the Central Bank showed that some $1.025m worth of Sand Dollars are currently in circulation. While some 101,636 Bahamians possess electronic wallets, there are just 1,512 of the merchant variety while the number of businesses actively accepting Sand Dollars was pegged at just 455.

“In my view the top priority has to be the collaborative effort with regard to education,” Mr Beckles said, calling for a combined push by the Central Bank, payment providers/banks operating as authorised Sand Dollar financial institutions (AFI), and the Government. “There has to be a concerted, collaborative effort to educate the merchant population, the consumer population and finding ways to incentivise adoption.

“What we need to be able to do is get more of the high traffic merchants.... the fast food operators, even the Government, the airport, the hardware stores to give serious consideration to the adoption of the Sand Dollar.” Among those companies that already accept it are Super Value, Solomon’s Fresh Market, Bamboo Shack, CBS Bahamas and the Bahamas Telecommunications Company (BTC).

The Central Bank’s update said it plans to give away some $1m throughout the course of 2023 and 2024 to incentivise Sand Dollar adoption. “As to the existing merchant ecosystem, as at January 2023, the Central Bank estimates that at least 80 percent of all domestic mobile payment transactions were denominated in Sand Dollars,” it said.

“This was due to increasing merchant and mobile wallet activations, as marketing efforts increased among the licensed payment services providers. In this regard, January’s volume of peer-to-peer or person-to-person (P2P) transactions was more than doubled compared to January 2022. The volume of person-to-business (P2B) transactions was more than three-fold higher than in the same period in 2022.

“In this regard, the average amount spent in P2B transactions was $68. Over 1,500 merchant relationships have been established by AFIs. The Central Bank has verified that more than 450 of these businesses are proficiently processing payments from all branded wallets.”

Acknowledging the need to step up training initiatives, the Central Bank said: “During the second quarter of 2023, the Central Bank’s promotional efforts and outreach will focus on increasing Sand Dollar usage within the existing merchant ecosystem. The particular emphasis will be on merchant training and awareness for more efficient processing of payments from all branded wallets in use within The Bahamas.

“The Central Bank is working with AFIs to improve the point of sales signage at merchants, which broadcast the acceptance of Sand Dollars, and to ensure more seamless use of QR Code displays to process payments. In the meantime, promotional giveaways of Sand Dollars will target increased spending, particularly at merchants that are considered systemically important to early-stage adoption efforts....

“In March 2023, the Central Bank began to recruit persons of all ages to serve as Sand Dollar Ambassadors within New Providence, Grand Bahama and the Family Islands. These individuals will support more sustained adoption outreach targeting their communities during 2023 and 2024. They will be trained to provide first-line support to wallet users and merchants around all of the Sand Dollar-enabled mobile payments applications in use within The Bahamas.”

Recruitment of the first ambassadors is to be completed this month, and the Central Bank added: “In March 2023, the Central Bank focused its Family Island outreach on central and southern Eleuthera. Events included virtual meetings with the Eleuthera Chamber of Commerce, local merchants and other stakeholders.

“The engagement culminated with an on-island visit from March 21-24, 2023. Digital wallet providers OMNI, which has a presence on the island, SunCash and Kanoo accompanied the Central Bank. The exercise resulted in the onboarding of six new Sand Dollar merchants. The Central Bank plans to visit northern Eleuthera and the surrounding cays during its next scheduled engagement.”