The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Payment fraud increased in value almost eight-fold to $21.2m in 2022 with debit cards accounting for four out of every five reported cases, it was revealed yesterday.

The Central Bank, in its 2022 annual report, revealed that while the number of reported incidents fell by 24.2 percent year-over-year there was a significant increase in the sums involved.

"In keeping with the emphasis on consumer financial protection, the Central Bank also collects data on fraud relative to cheques, debit and credit cards," the regulator said. "In 2022, the reported number of such cases reduced by 24.2 percent to 6,319. However, the corresponding value expanded to $21.2m from $2.6m.

"Analysed by type, instances of debit card fraud constituted 80.5 percent of total cases, while the attendant value comprised 71.4 percent of the overall value. Reported credit card fraud comprised 18.9 percent of total cases, and some 6 percent of the associated value. As cheque usage continued to decline, the instances of this type of fraud represented just 0.6 percent of total cases against 22.6 percent of overall value."

Elsewhere, some 61 percent of foreign exchange outflows in 2022 via the Investment Currency Market (ICM) went towards the acquisition of the Bahamian government's external bonds after the 5 percent investment premium was waived for several months by the Central Bank.

"Outflow activity via the ICM totalled $272.7m during 2022, a significant share representing purchases of Bahamas Government external bonds, which traded for a period at a substantive discount on the international markets. From October 6, 2022, through end-2022, the Bank granted a temporary waiver of the ICM premium on investments in The Bahamas Government’s external bonds," the regulator added.

"Of the $227.4m approved for transactions, approximately $166.9m was used through year-end. A number of approvals were allowed to be carried over to January 2023." Of the $35m allocated on an annual basis to Bahamian broker/dealers for Bahamas Depository Receipt (BDR) investments in foreign stocks and securities, some $21.6m was used in 2022 by two of the five eligible firms.

When it came to dormant bank accounts, the Central Bank revealed: "As at December 31, 2022, the Bank maintained custody of 41,878 dormant facilities with balances totalling $89m denominated in six currencies. Balances in US dollars and Bahamian dollars combined accounted for a dominant 91.4 percent of the total, while the Canadian dollar, Swiss franc, Euro and British pound accounted for the remaining 8.6 percent.

"In accordance with the Act, as at December 31, 2022, an estimated $1.9m in dormant funds was due for remittance to the Government against the applicable ten-year custodial period expiration." As for digital transactions, the Central Bank said growth was "highlighted by greater overall use of credit cards, debit cards and automated cash dispensing services, with reliance on credit finance transactions.

"These shifts also captured the uplift in spending from the depressed levels estimated during the pandemic," it added. "For card-based payments, the volume of debit card transactions increased by 18.2 percent to 20.8m with the value expanded by 16.6 percent to $2.3bn.

"In 2022, the number of credit cards issued or renewed by commercial banks expanded by 4.9 percent to 95,049, and the associated value of debt owed also rose by 2 percent to $221.2m. The volume of purchases and other transactions using credit, most of which were repaid within the same period, rebounded by 27.5 percent to $1.2 billion. This was still below pre-pandemic levels, given shifts towards debit cards.

"Disaggregated by access amount, the number of cards with a credit limit under $5,000 grew by 6.2 percent to 62,961, while the outstanding balance decreased by 5.9 percent to $70m. Meanwhile, the number of cards issued with a credit limit between $5,000-$10,000 increased by 4.4 percent to 19,443, and the corresponding value by 7.1 percent to $64.7m," the Central Bank continued.

"However, the number of accounts extending credit with limits in excess of $10,000 declined by 0.7 percent while the value grew by 5.5 percent to $86.5m. As for automated banking services, the number of ATMs slightly reduced to 385. However, the volume of cash denominated transactions conducted through these devices grew by 9.6 percent to 8.9m and associated value rose by 11.9 percent to $2.1bn.

"Cheque usage remained low except for large value transactions. In particular, the number of processed cheques declined by an annualised 11.9 percent to 1.1m, albeit the corresponding value rose by 1.1 percent to $4.3bn."