Local interest gathering in Jamaica's fintech regulatory sandbox


Local interest gathering in Jamaica's fintech regulatory sandbox

Four licence applications as interest grows for mobile wallet and prepaid cards

Observer business writer

Friday, May 08, 2020

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The Bank of Jamaica is reporting that its recently overhauled regulatory regime for electronic retail payment system, dubbed the fintech regulatory sandbox, is receiving much traction from the local financial market.

Already the Bank of Jamaica (BOJ) has received four applications for licences under the sandbox regime, which sets out the legal and regulatory framework for payment service providers (PSPs) in Jamaica. Two applications are from regulated entities such as cambios or deposit-taking institutions (DTI) to offer a prepaid card, and two applications are from fintech companies.

One of the fintech companies is offering a prepaid card product while the other is marketing a “tokenisation application”. In addition, the BOJ has received telephone queries to include two entities requesting to offer both mobile wallets and prepaid card products.

The BOJ disclosed yesterday that it is awaiting those two applications, noting that it “has not received a complete application that meets all the sandbox requirements, and entities are amending to resubmit”.

A fintech regulatory sandbox is a controlled environment for the deployment and testing of financial technology.


The objectives of the sandbox are to provide a platform to encourage innovations in financial services, promote competition and promote financial inclusion. The sandbox serves to promote the BOJ's understanding of fintech products, services and business models, and inform the framing of new regulations or the amendment of existing regulations.

The sandbox replaces the BOJ's Electronic Retail Payment Services (ERPS) Guidelines, which was withdrawn on March 2nd this year, due to limitations of the underlying legislative and regulatory framework for PSPs. The Electronic Retail Payment Services Guidelines, which sought to widen and capture developments in the retail payment system, were first published in 2013, updated and then republished in November 2018 with an effective date of February 2019.

Eligible participants in the sandbox are BOJ-regulated entities such as DTIs, cambios, remittance service providers and fintech companies in partnership with DTIs. This is to ensure that BOJ has oversight over the regulated entity offering the payment services.

The sandbox is open to licensed securities dealers that have been granted permission by the Financial Services Commission to participate.

Speaking at a virtual press conference yesterday to update the nation on its recently announced Fintech Regulatory Sandbox, BOJ Governor Richard Byles pointed out that in launching the sandbox on March 16 this year, “the BOJ has joined its regulatory counterparts throughout the world, including the United Kingdom, Hong Kong and Malaysia, in seeking to understand the opportunities that can be presented by financial technology, particularly in delivery of payment services and consumer protection”.

He emphasised that the objectives of the sandbox are to provide a platform to encourage innovations in financial services, promote competition and promote financial inclusion. Participants in the sandbox will be permitted to test innovative financial products, services and businesses in a controlled environment.

Byles stressed that the sandbox will have appropriate safeguards in place to manage risks, including financial stability risks. For her part, deputy governor in charge of market operations and currency, Natalie Haynes, who also spoke at the virtual press briefing, pointed out that three entities with products already authorised under the former ERPS Guidelines continue to operate in the retail payment system.


These three providers are NCB Quisk Mobile Money (mobile wallet), Sagicor MyCash prepaid Mastercard, and Alliance Payment Services Limited ePay Mastercard (prepaid card). She noted that the total number of electronic retail payment transactions for the three ERPS providers last year was 5.61 million, with a total transaction value of $11.69 billion coming from 203,390 accounts.


Director general of the Office of Utilities Regulation (OUR), Ansord Hewitt argued that the new regime will provide opportunities for the financial and telecommunications sectors by facilitating innovation in developing financial technology products, services and business models locally within a controlled environment, in accordance with various safeguards such as specific client limits. The OUR is a signatory to a memorandum of understanding with the BOJ to develop Jamaica's electronic retail payment system.

The OUR boss charged that the utilities regulatory body recognises its responsibility as the regulator for the telecommunications sector under the existing MoU. These responsibilities include sharing information with the BOJ that will enable the regulation and monitoring of telecommunications operations participating in providing digital financial services; promoting the protection of customers by encouraging the use of applicable message notification by users; encouraging the use of best security practices provided over mobile networks; and promoting further competition through the facilitation of access to telecommunications services provided by carriers and through interoperability among competing providers.

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