In the digital age, Guyana’s economy is still predominantly cash-based

Oct 21, 2023 Features / Columnists, Peeping Tom

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Kaieteur News – We now have smart phones, online banking, and contactless payments. You can transfer credit from your phone to a friend but yet you find that some businesses still do not have the means or refuse to accommodate electronic payments.

Given the spread of digital and electronic technologies, it might appear counterintuitive that people in Guyana are still grappling with long teller lines at commercial banks. The frustration that people express on social media about having to stand for long periods in such lines, however, is a reflection of the persistence and dominance of cash-based transactions in the country.

Guyana remains largely a cash-based economy, where the overwhelming majority of daily transactions rely on paper money.  Most businesses in the country still lack the infrastructure to facilitate electronic payments.

Some major businesses – large scale in operation – do not offer electronic payment options, despite their substantial daily sales turnovers. These businesses often lack the means to accept digital payments.

Many established supermarkets do accept electronic payments, but not all. Some supermarkets run by non-Caribbean nationals often do not have the infrastructure to enable electronic payments, which further restricts the adoption of digital transactions.

Likewise, several petrol stations in Guyana do not offer electronic payment options. When customers inquire about paying with cards or other digital means, they are often met with the response that these facilities are not available. This, in turn, discourages individuals from transitioning to electronic payment methods for their everyday needs.

Setting up an electronic payment system requires a initial investment, which might deter smaller businesses with limited capital. For small businesses therefore, there are legitimate reasons for sticking to cash-based transactions. Implementing electronic payment systems requires initial investments in hardware, software, security measures, and staff training, which can be unaffordable for small businesses. But the same cannot be said for medium-scale and large-scale enterprises.

In some areas, the technology required is either absent or not functioning properly. Internet access may be slow and this acts as a barrier to graduating towards electronic payments.

Some businesses may argue that there is insufficient demand from customers for electronic payments, thus questioning the return on investment. And this is true because some customers have grown accustomed to cash payments and are not comfortable with making electronic payments. Some even are fearful that their accounts will be hacked and they will lose their savings.

Businesses, in turn, have concerns about the security of digital transactions and the potential for fraud, which can further deter them from transitioning to electronic payment methods.

While these concerns are valid, it is essential for Guyana to embrace digitization to keep pace with the global economy and to offer more convenience to its citizens. The government has been touting digitization in other sectors. Only recently, the Head of State said that the country would be placing emphasis on digitization. And he stressed the need for more digitization in public services and in the private sector.

Given this declared thrust by the government, it should in collaboration with financial institutions, consider making electronic payments mandatory is some sectors. This can be a phased policy beginning with specific types of businesses which usually have large daily turnovers.

The policy can start with hardware dealers, petrol stations and, supermarkets. All that is needed is for the government to insist firstly that these businesses, as a condition of their operating licenses, must offer access to electronic payment systems.

Later, the government can pass regulations or laws which mandate that businesses of a certain size or type must provide electronic payment options to customers. These regulations could be phased in gradually, allowing businesses time to adapt.

The transition to a more digitized economy will bring numerous advantages. For businesses, it can streamline operations, improve security, reduce the risk of theft, and enhance record-keeping. Customers will benefit from greater convenience, reduced dependence on cash, and enhanced financial security. People would not need to be walking around with wads of cash to make payments.

Guyana has the potential to leapfrog into the digital era. However, this transition requires careful planning, investment, and a collaborative effort between the government, financial institutions, and businesses. There will be resistance to move towards greater use of electronic payments – for reasons that are well-known. But for the fastest growing economy in the world, in this decade to still be a cash-based economy is a contradiction.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions and beliefs of this newspaper and its affiliates.)

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• age, cash-based, Digital, Guyana, Peeping Tom

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