Go Lean Commentary
The credit card industry is advancing, moving forward. The Caribbean should likewise be advancing, moving forward.
A previous blog-commentary demonstrated that the region’s banks are ready to accept electronic payment transactions, that their deployment of credit card terminals allow the introduction of the Caribbean Dollar (C$) as a regional currency. Well now, those terminals need to be upgraded …
… or the merchants will suffer the resultant risks.
The world has already moved forward from the standard of magnetic stripe cards. The present is now smart cards…or no card at all; (payment apps on Google’s Android and Apple’s iPhone devices proliferate). The future of the credit, debit and payment card is more than a card, it’s a “computer science laboratory” in a pocket or purse!
Yes, payment systems in the Caribbean region must be ready for this new world of electronic commerce.
Getting the region ready was the mission of the book Go Lean … Caribbean, a roadmap for the introduction and implementation of the Caribbean Union Trade Federation (CU) and the Caribbean Central Bank (CCB). This Go Lean roadmap depicts these entities as hallmarks of technocratic efficiency; agile to not just keep pace of technology and market changes but also to drive change as well. This ability is necessary for new payment systems, new cards and new settlement schemes. The Go Lean roadmap calls for a regional currency for the Caribbean Single Market, the Caribbean Dollar (C$), to be used primarily as an electronic currency. These schemes will impact the growth of the regional economy in both the domestic and tourist markets. Consider this one CU scheme to incentivize more spending among 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 smart-phone 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.
This is an example of an electronic payment system facilitating more commerce (e-Commerce). So the CCB will settle all C$ electronic transactions – cashless or accounting currency – in a MasterCard-Visa-style interchange / clearinghouse system.
As of October 1, 2015 bankcards must possess a smartchip, or assume the risk of fraud transactions; see VIDEO below. The CU/CCB roadmap anticipated smartchips from the outset of the Go Lean book, as this covers more than just commerce, but addresses security as well. Commerce, security and (bank) governance – these are all societal engines that must be optimized for societal progress. In fact, the Go Lean roadmap has these 3 prime directives:
- 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 payments schemes being considered by the rest of the world in the following article, are already envisioned for deployment in the Caribbean region:
VIDEO – New Security Chip in Credit Cards Unveiled – http://abcnews.go.com/WNT/video/security-chip-credit-cards-unveiled-34114798
Posted September 28, 2015 – New law required each card to be outfitted with a credit card chip that makes it harder to steal personal information.
The benefits of these technologies, as related in the foregoing VIDEO, cannot be ignored for their security features. Previously this commentary explored the issues associate with cyber-security and data breaches. With tourism as the primary economic driver, the Caribbean region cannot invite millions of visitors to our homeland and then ignore their need for protection; the kind of protection that has become standard in this new world of heightened information security.
The Go Lean roadmap calls for the CU to regulate the region’s Communications and Media affairs – federal Department of Commerce – under a separation-of-power mandate with the member-states. This authority must be super-national and have purview for cross-border environments.
With the CCB taking the lead for this deployment, the effort is not meant to be technical, but rather economic. The greatest benefit of deploying these electronic payment scheme is the acceleration of M1 in the regional economy; this is the measurement of currency/money in circulation (M0) plus overnight bank deposits. As depicted in the Go Lean book, and subsequent blog-commentaries, M1 increases allow central banks to create money “from thin-air”; referring to the money multiplier.
The Caribbean region needs this benefit. The more money in the system, the more liquidity for investment and industrial expansion opportunities. Plus, the nullifying effects on Black Market spurns more benefits.
The Go Lean 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, guests-tourists-ship-passenger payment cards and cyber security. This is the charge – economics, security and governance – of the 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.
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|
|Tactical – Separation of Powers – Department of Commerce – Communications and Media Authority||Page 79|
|Implementation – Assemble Central Bank Cooperative||Page 96|
|Implementation – Assemble Caribbean Regional Regulatory Organs – like CTU||Page 96|
|Implementation – Ways to Deliver||Page 109|
|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 Enhance Tourism||Page 190|
|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 – Facilitating e-Commerce||Page 201|
|Appendix – Assembling the Caribbean Telecommunications Union (CTU)||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:
|http://www.goleancaribbean.com/blog/?p=5668||Move over Mastercard/Visa|
|http://www.goleancaribbean.com/blog/?p=4425||Cash, Credit or iPhone …|
|http://www.goleancaribbean.com/blog/?p=3889||RBC EZPay – Ready for Change|
|http://www.goleancaribbean.com/blog/?p=3881||The Need for Regional Cooperation to Up Cyber-Security|
|http://www.goleancaribbean.com/blog/?p=3617||Bahamas roll-out of VAT leading more to Black Markets|
|http://www.goleancaribbean.com/blog/?p=2074||MetroCard – Model for the Caribbean Dollar|
|http://www.goleancaribbean.com/blog/?p=1350||PayPal expands payment services to 10 markets|
|http://www.goleancaribbean.com/blog/?p=906||Bitcoin virtual currency needs regulatory framework to change image|
|http://www.goleancaribbean.com/blog/?p=476||CARICOM urged on ICT, e-Commerce and e-Payments|
This is no longer the future. This is here and now.
This is good! The benefits of this new requirements are too enticing to resist this change: incentivizing more cruise-tourism spending, fostering more e-Commerce, enhancing security, increasing regional M1, mitigating Black Markets, regional oversight of this technology, growing the economy, creating jobs and optimizing governance.
Now is the time for all stakeholders of the Caribbean, (residents, visitors, merchants, vendors, bankers, and governing institutions), to lean-in for the empowerments described in the book Go Lean … Caribbean. This change can help to make the Caribbean a better place to live, work and play. 🙂
Download the book Go Lean … Caribbean – now!