Cash, Credit or iPhone …

Go Lean Commentary

Caribbean society is advancing; moving forward…

A previous blog/commentary demonstrated that the region’s banks are ready to accept electronic payments transactions, that their deployment of credit card terminals allow the introduction of the Caribbean Dollar (C$) as a regional currency. This is a good start!

But the world has already moved forward from that standard. The future of the credit card, debit card and payment card is missing … the card! Yet, still the Caribbean region must be ready.

Getting the region ready is the mission of the book Go Lean … Caribbean, a roadmap for the introduction and implementation of the Caribbean Union Trade Federation (CU) and the Caribbean Central Bank (CCB). This Go Lean roadmap depicts these entities as hallmarks of technocratic efficiency; therefore the agility will be part of the institutions’ DNA to not just keep pace with technology and market changes but also to drive change as well. In fact, these 3 statements are identified as prime directives for the CU/CCB effort:

  • Optimization of the economic engines in order to grow the regional economy to $800 Billion & create 2.2 million new jobs.
  • Establishment of a security apparatus to protect the resultant economic engines.
  • Improvement of Caribbean governance to support these engines.

So the electronic payment schemes being considered by the rest of the world, in the following article, must also be envisioned for deployment in the Caribbean region:

Title: Cash, Credit or iPhone?
By: Chris Clayton, Special Contributor

If one word summed the future of how we pay for things, it certainly wouldn’t be “plastics”. Mobile payments are emerging as the ultimate disrupter of cash and credit cards, with Apple Pay, Google Wallet and others competing in an ever crowded market.

By nearly every psychographic measure, Elliot Payne is the ideal Apple customer. He lives in a hip city (Minneapolis), has a creative job (designer as a digital ad agency), moonlights as a DJ, blogs about tech and – most importantly – is a proud early adopter. So when Apple released its new mobile payment service on iPhone 6 in October, guess who tried it out at Whole Foods on the first day it was available? At checkout, Payne placed his thumb on his phone’s touch ID sensor, waved it in front of a reader on the payment terminal, and before he could say “expensive organic groceries,” he had used his fingerprint and smartphone to buy expensive organic groceries.

Not that swiping plastic is any more time-consuming than holding up your phone, but Payne argues that convenience isn’t Apple Pay’s main selling point. “Its more about security,” he says. Apple Pay uses something called “tokenization,” which replaces the card info stored on your phone with a special number used to make payments. That number is translated only when it reaches your credit card network, meaning the merchants never sees your financial information. It is not foolproof, but it’s a lot safer than swiping plastic, which leaves your identity exposed to hackers.

Innovations such as tokenization in the mobile space are slowly but surely pushing consumers away from cash, checks and physical cards

CU Blog - Cash, Credit or iPhone - Photo 1

According to a 2014 Business Insider report, in-store mobile payments in the United States (that is, using your phone to pay for goods rather than cash, check or plastic card) will grow by 153 percent from $1.8 billion in 2013 to $190 billion in 2018. Pair that with data from a 2014 Forrester Research eCommerce forecast predicting online retail sales to jump from $294 billion in 2014 to $414 billion in 2018, and its clear that our our growing love of smartphones and tablets is impacting how and where we shop. Predictably, banks, credit card networks, retailers and tech companies are clamoring to invent bells and whistles to make mobile payments easier, more secure, and – to borrow a phrase from a Square spokesperson when we asked how the merchant services outfit planned on winning at the point of sale – more “magical.”

Excerpt from: Delta SKY In-flight Magazine January 2015; retrieved from:


Another article/VIDEO relating the Apple Pay innovation: Huntington Bank joins Key, PNC, US Bank and Chase with Apple Pay Deployment.

VIDEO – Apple Pay Demo  –

Published on Sep 9, 2014 – Apple has revealed its mobile payments play, and it features NFC and Touch ID, as many expected. Essentially, with the new iPhones, a user holds their phone near a payment terminal, and the payment card they’ve set as a default is called up, prompting a Touch ID action where the user authenticates their transaction.


Apple Pay is not the only Mobile Payment Solution. Other options have emerged:

The Go Lean book posits that electronic payment schemes (card-based, NFC and internet) are very important in this strategy to elevating the Caribbean economy, security and governing engines.

This Go Lean/CU/CCB roadmap looks to employ electronic payments schemes to impact the growth of the regional economy in tourism and other domestic endeavors. One CU scheme is directly targeted to impact one segment of tourism eco-system: Cruise line passengers:

  • The cruise industry needs the Caribbean more than the Caribbean needs the industry. But the cruise lines have embedded rules/regulations designed to maximize their revenues at the expense of the port-side establishments. The CU solution is to deploy a scheme for smartcards (or smartphone applications) that function on the ships and at the port cities. This scheme will also employ NFC technology – (Near Field Communications; defined fully at Page 192 – so as to glean the additional security benefits of shielding private financial data of the guest and passengers.

The goal of electronic payments is to facilitate more electronic commerce (or e-Commerce). The Go Lean roadmap defines that the Caribbean Dollar (C$) will be mostly cashless, an accounting currency. So the CCB will settle all C$ electronic transactions (MasterCard-Visa style or ACH style) and charge interchange/clearance fees. Apple Pay is not a “free” service; card issuers have to pay about 15 basis points (.15%) to Apple, and merchants pay about 3% interchange fees for the e-Payment transaction (MC/Visa/AmEx) itself. Acquirers (sales and consolidation organizations) must be in place. So this scheme allows for the full emergence of the e-Commerce eco-system.

The benefits of these technologies, as related in the foregoing articles, cannot be ignored for their security benefits. Previously this commentary explored the perplexing issues associate with cyber-security in this internet age. We cannot invite millions of visitors to the Caribbean region and then show disregard for their protections; including information security.

In terms of governance, there is the urgent need for regional coordination of the Caribbean radio spectrum. This regulates mobile phones, Wifi and satellite communications. Again, we cannot invite millions of guests and then exploit them with roaming charges the moment they turned on their smartphones to complete a payment transaction. This issue was also raised and explored in a previous Go Lean blog commentary. This is why the Go Lean roadmap calls for a consolidated Communications and Media Authority, operating under the CU’s Department of Commerce, to lead the oversight of these attendant telecommunication endeavors. The consequences of mis-management in this regards are dire. Soon and very soon, we will have tourists arriving on our shores with no credit cards; armed only with their smartphones; ready to tap unquenchable sums of discretionary monies for their enjoyment of Caribbean hospitality.

Still yet, the greatest benefit of marshaling electronic payments systems is not governance, nor security, nor technology; it is economics.  These electronic payment schemes allow for more M1 in the regional economy; this is the measurement of currency/money in circulation (M0) plus overnight bank deposits. As M1 values increase, there is a dynamic to create money “from thin-air”, called the money multiplier. The more money in the system, the more liquidity for investment and industrial expansion opportunities. Lastly, there will be the additional economic benefit of mitigating Black Market “under-the-table” transactions, as all these electronic transactions must be processed through some clearing house, in the case of the Go Lean roadmap, this will be the role of the CCB, a cooperative of the region’s central banks.

The Go Lean book and accompanying blogs posit that the Caribbean is in crisis, and that this crisis will only worsen without some technocratic efficiency with currency and money supply (M1). The world is moving very fast, embracing one technological advancement after another; we cannot only consume these innovations, we must produce and guide advancements for ourselves:

The Best Way to Predict the Future is to Create it - Photo 1

The book posits that to adapt and thrive in the new global marketplace there must be more strenuous management and technocratic oversight of the region’s currencies, telecommunications (information security & spectrum) and governance. This is the charge of Go Lean roadmap, opening with these pronouncements; Declaration of Interdependence (Page 13 and 14):

xxiv.    Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles. Thereby attracting direct foreign investment because of the stability and vibrancy of our economy.

xxv.    Whereas the legacy of international democracies had been imperiled due to a global financial crisis, the structure of the Federation must allow for financial stability and assurance of the Federation’s institutions. To mandate the economic vibrancy of the region, monetary and fiscal controls and policies must be incorporated as proactive and reactive measures. These measures must address threats against the financial integrity of the Federation and of the member-states.

xxvii. Whereas the region has endured a spectator status during the Industrial Revolution, we cannot stand on the sidelines of this new economy, the Information Revolution. Rather, the Federation must embrace all the tenets of Internet Communications Technology (ICT) to serve as an equalizing element in competition with the rest of the world. The Federation must bridge the digital divide and promote the community ethos that research/development is valuable and must be promoted and incentivized for adoption.

xxviii. Whereas intellectual property can easily traverse national borders, the rights and privileges of intellectual property must be respected at home and abroad. The Federation must install protections to ensure that no abuse of these rights go with impunity, and to ensure that foreign authorities enforce the rights of the intellectual property registered in our region.

xxx. Whereas the effects of globalization can be felt in every aspect of Caribbean life, from the acquisition of food and clothing, to the ubiquity of ICT, the region cannot only consume, it is imperative that our lands also produce and add to the international community, even if doing so requires some sacrifice and subsidy.

“Step One, Day One” in the Go Lean roadmap is the assembly of existing Caribbean organs under the regional administration of the CU. This includes the Caribbean Telecommunications Union (CTU), and the CCB governance; as a cooperative of existing central banks. The strategy is to implement the bank and C$ currency with the appropriate regulatory framework, tools and infrastructure, to facilitates the electronic schemes identified above.

The Go Lean book details a series of community ethos, strategies, tactics, implementations and advocacies to foster the proper controls for electronic/mobile payments in the Caribbean region:

Community Ethos – Economic Principles Page 21
Community Ethos – Money Multiplier Principle Page 22
Community Ethos – Security Principles – Privacy versus Public Protection Page 23
Community Ethos – Governing Principles – Lean Operations Page 24
Community Ethos – Governing Principles – Cooperatives Page 25
Community Ethos – Promote Intellectual Property Page 29
Community Ethos – Ways to Bridge the Digital Divide Page 31
Community Ethos – Ways to Improve Sharing Page 25
Strategy – Mission – Fortify the monetary needs through a Currency Union Page 45
Tactical – Separation of Powers – Central Banking Page 73
Implementation – Assemble Central Bank Cooperative Page 96
Implementation – Assemble Caribbean Regional Organs – like CTU Page 96
Implementation – Ways to Deliver Page 109
Implementation – Ways to Impact Social Media Page 111
Planning – 10 Big Ideas – #2: Currency Union / Single Currency Page 127
Anecdote – Caribbean Currencies Page 149
Advocacy – Ways to Grow the Economy Page 151
Advocacy – Ways to Create Jobs Page 152
Advocacy – Ways to Mitigate Black Markets Page 165
Advocacy – Ways to Foster Cooperatives Page 176
Advocacy – Ways to Impact Cruise Tourism – Smartcard scheme Page 193
Advocacy – Ways to Foster Technology Page 197
Advocacy – Ways to Foster e-Commerce Page 198
Advocacy – Reforms for Banking Regulations – Central Banking Efficiencies Page 199
Advocacy – Ways to Impact Main Street – Downtown Wi-Fi – Time and Place Page 201
Appendix – Assembling the Caribbean Telecommunications Union Page 256

The points of effective, technocratic banking/currency stewardship and dynamic change in the mobile communications space were further elaborated upon in these previous blog/commentaries: Net Neutrality: It Matters in the Caribbean Systems for Emergency Telephone Numbers in Crisis; need for Mobile App for Emergencies Google and Mobile Phones – Here comes Change Lessons from the Swiss unpegging the franc RBC EZPay – Ready for Change The Need for Regional Cooperation to Up Cyber-Security Bahamas roll-out of VAT leading more to Black Markets For Canadian Banks: Caribbean is a ‘Bad Bet’ MetroCard – Model for the Caribbean Dollar PayPal expands payment services to 10 markets Bitcoin virtual currency needs regulatory framework to change image One currency, divergent economies CARICOM urged on ICT, e-Commerce and e-Payments

The Caribbean ought to participate in more mobile smartphone development. There are so many benefits from efficient regional oversight of this technology: more cruise tourism spending, fostering more e-Commerce, increasing regional M1, mitigation of Black Markets, growing the economy, creating jobs, enhancing security and optimizing governance. Mobile smartphones are the future, and that future is now! (We, the Caribbean, have to play catch-up).

Now is the time for all stakeholders of the Caribbean – residents, visitors, bankers and governing institutions – to lean-in for the empowerments described in the book Go Lean … Caribbean. The benefits are many; but most important, the success of the roadmap can make the Caribbean a better place to live, work and play.  🙂

Download Go Lean … Caribbean – now!

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