Mastercard enters Jamaica, targets unbanked
It’s been roughly a month since technology company Mastercard settled into its new office space in New Kingston, but discussions are already ongoing to have the company doubling users of electronic payment systems across Jamaica over the next three years.
Jamaica marks the first English-speaking Caribbean country where Mastercard has set up shop, having opened offices in the Dominican Republic and Puerto Rico some two months ago. Mastercard will next expand its footprint to Trinidad and Tobago and further to other islands in the region.
The company wants to triple its Caribbean market share by 2024.
Mastercard’s entry into Jamaica comes a year after the company undertook a fresh study of the markets, which, according to division president of the Caribbean Marcelo Tangioni, revealed that the use of cards for personal expenditures in Jamaica was below 20 per cent.
“We were able to find some very interesting things regarding the islands in the Caribbean. The first conclusion was that the Caribbean was pretty sizeable in terms of electronic payments, a nice surprise for us,” Tangioni said during a press briefing on Tuesday.
“We also measured other payment flows – the most traditional is personal consumption expenditure – and the potential for government expenditure, corporations, remittances, and tourism. We wanted to see the potential for those five areas of the 27 islands we studied at the time, and the conclusion was very positive,” he said.
Mastercard’s refreshed five-year strategy will see the technology company attempting to double the use of cards for personal expenditures to 40 per cent by 2022. It involves partnering with financial institutions and companies to tap into the cash economy, which is believed to be valued at north of $600 billion.
“There is a particular product that is growing faster than any other – that’s debit. It is by far the preference of this new generation, so we have to make sure that debit is ready to transact on the online environment but also that the experience is seamless and that it is a safe environment,” Tangioni said.
No. 2 commercial bank Scotiabank Jamaica has partnered with Visa Inc for its debit card service, which allows Jamaicans to make international purchases, while No. 1 bank National Commercial Bank Jamaica offers a Midas debit card for local purchases, buying credit for mobile phones, withdrawing money, transferring funds, and paying bills.
Aside from its focus on debit accounts for the unbanked, Mastercard plans on introducing new technologies that promise Jamaicans a “seamless and secure experience in both physical and digital commerce”.
Earlier this month, Costa Rica became the first country in Latin America and the Caribbean to announce the implementation of Tap on Phone, a payment-acceptance solution that allows merchants to receive payments from any contactless-enabled card or mobile wallet to their Android phone. The initiative was launched through Promerica Bank in partnership with Mastercard, which claims leadership in the design of security requirements for Tap on Phone.
Tangioni did not disclose details of Mastercard’s planned initiatives for Jamaica or name the financial institutions with which the company is holding talks, but he said that he projects that over the next 18 to 36 months, Jamaica should see significant changes in electronic payment structures.
“We are having conversations with our partners about different types of acceptance models to introduce. Our regulators earlier this year introduced the Electronic Retail Payment Services, ERPS 2, regulatory framework that makes it possible to target the long tail, so we believe between mobile point of sale, which is the traditional small-payment acceptance method, and Tap on Phone, there is going to be significant changes in the market,” said Dalton Fowles, Mastercard country manager for Jamaica and Trinidad and Tobago.