The Tribune

• 2022 transactions to ‘double’ this year’s $100m

• Forecasts customer ‘adoption’ to soar by 50%

• Warns ‘wall closing in’ for traditional transfers

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian digital payments provider is forecasting a 20-25 percent profits increase in 2022 based on the financial transactions it handles being “no less than double” this year’s $100m.

Jeffrey Beckles, Island Pay’s managing director, told Tribune Business he anticipated that digital financial services usage will increase by 50 percent year-over-year in 2022 as consumers, merchants and the Government become increasingly comfortable with the technology and its use as a means of payment.

Describing digitisation, and the roll-out of electronic financial services, as “probably the most second critical component” for economic growth behind COVID-19 revival plans, he added that Island Pay had seen demand for its existing services menu - especially pre-paid MasterCards and Sand Dollar purchases - increase significantly during 2021.

Mr Beckles said Island Pay had grown from a four-strong team when he joined the company just over one year ago to an 11-strong workforce that provides it with the platform for further expansion. Already present in Grand Bahama and Abaco, as well as New Providence, he revealed that it is poised to enter Exuma, Eleuthera and the Berry Islands as early as the 2022 first quarter.

“I’m happy to say we’ve surpassed the $100m mark in annual transactions and transfers, which is quite an achievement,” Mr Beckles said of Island Pay’s performance for 2021 to-date. “Fifty percent of that number is non-government related transfers, which means the average person is using their [digital] wallet to pay bills and put top-up on their phones to make purchases.

“We’ve seen a significant improvement in the adoption of our MasterCard programme, which has been a game changer..... This has been a strong point in the $100m worth of transactions and transfers that we have seen.”

Island Pay, as “principal licence holder” with MasterCard, is able to issue cards attached to its clients’ digital wallets. Mr Beckles revealed that pre-paid MasterCard purchases by the digital payments provider’s clients had jumped 50 percent this year, accounting for one of its major growth areas, along with purchases of the Bahamian digital currency at its 13 New Providence kiosks.

“It expands our capacity, and enables wallet holders to have fiat currency, have Sand Dollars, on it,” the Island Pay chief added of the MasterCard cards and tie-up. “It has drastically expanded the capacity of the user, which serves to strengthen the economy, because users have more flexibility with their wallet, more security and can transfer dollars to their card when they travel.”

Describing this as a “huge advantage” for Bahamian consumers, Mr Beckles said they can load up to $500 on to a pre-paid card at any Island Pay kiosk. “That has greatly empowered the unbanked, the under-banked and those that cannot be bothered to go to the bank,” he added.

“It provides them with the ability to manage their money without adding to their debt. Consumer debt is a problem, but with our programme they have access to services they would not have. That empowers the average Bahamian who otherwise would not have access to a debit or credit card.”

Mr Beckles conceded that The Bahamas needs to further “accelerate” the so-called “adoption rate”, or pace at which Bahamians use digital financial services, if the economy is become and remain competitive in the post-COVID world.

Optimistic that the Government’s digitisation drive, the desire of merchants to go cashless, and global trends will unite to help achieve this objective, he told Tribune Business of the adoption rate: “I think we’ll see as much as a 50 percent increase in 2022, and that’s going to be driven by a couple of things.

“The Government will accelerate its plans to digitise services, and as the merchant community continues to go cashless it will be driven by that. The third thing that will drive it is access to global markets as they become digitised. Bahamians love access to global markets, and these things are going to drive the adoption rate.

“The walls are closing in. You cannot access certain services by traditional means, so you have to access them through digital means. I think we saw that in the 50 percent of our $100m in transfers this year being driven by non-government transfers.”

The Island Pay chief revealed that it has handled some 500,000 in transactions for 2021 to-date, with the peak daily value witnessed so far amounting to $2.6m. The peak daily volume is 13,000 transactions and transfers, with the provider’s current digital wallet client base standing at 24,000.

While “the adoption rate is less than we’d like”, Mr Beckles said usage continues to grow at a significant pace which makes him increasingly confident about Island Pay’s growth prospects. Asked about the transaction value the company was likely to handle next year, he predicted it would be “no less than double” this year’s $100m mark and could even surpass the $200m level.

“On our current trajectory, and I’m happy to say we are profitable already, I think we could see our profits up by 20-25 percent [in 2022], which would be reasonable. That’s not beyond consideration,” Mr Beckles said.

“We are still in recovery mode, where customers are still trying to find their feet, their legs as it were. Businesses are beginning to settle into this new norm. We have less people on the road, less people moving about, less people in office, which translates into online services and puts it right in our lap.”

He added that the COVID-19 pandemic and associated lockdowns/health restrictions, which forced persons into online working/living and staying at home, had accelerated the move to online financial services by “easily 90 percent; almost 100 percent. Remember we were doing a snail’s pace walk, and then accelerated more in two years than we had done in ten years”.

Warning that The Bahamas cannot afford to “take our foot off the pedal” when it comes to the country’s digital transformation, as there is “too much to lose”, Mr Beckles said Island Pay and other electronic payments providers will help fill the vacuum created by commercial bank withdrawal from the Family Islands.

“We have multiple locations in Nassau,” he added. “We are in Grand Bahama and Abaco, and are soon to be in additional Family Islands in the 2022 first quarter. We’ll be in Exuma, Eleuthera and the Berry Islands.

“It is part of the plan to be nationwide, but also part of the plan to absorb some of the pressure created by the vacuum from commercial banks leaving the islands. Our current models can provide services to those islands.”

Mr Beckles added that Island Pay also plans to expand the 24-hour, seven days per week, customer call centre that it established in January 2021 in the upcoming year. “We’re looking to expand our presence in Freeport as well,” he said.

“We will have staff in Freeport and Abaco. We’re also expanding our presence in Eight Mile Rock, West End and East End as early as January.”