The Growing Role of Digital Finance in Guyana

Sep 03, 2024 SEO

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Guyana’s economic landscape is undergoing a gradual transformation with the increasing adoption of digital payment and modern financial systems. Despite the country’s small population, Guyana remains a predominantly cash-based economy. However, recent developments indicate a growing interest in modern financial technologies, especially as foreign investment is ploughing into the country. As the economy grows, so does the demand for faster, more secure, and accessible transaction methods grows, businesses and consumers alike are learning about the convenience and efficiency digital payments offer.

 

Over the past few years, mobile banking and online payment platforms have become more viable, providing a glimpse into the country’s desire to shift toward a more digitally-driven financial landscape. In July 2024, Mobile Money Guyana announced its API integration for digital payments. This integration aims to improve mobile payment options for both businesses and consumers, providing a more secure and efficient solution for online transactions in the country. 

 

For instance, in Guyana, online casino gambling is characterized by a lack of specific regulations, allowing Guyanese players to engage in online gambling using mobile devices. Techopedia’s Daniel Smyth explains that the fastest payout casinos have modern banking options. These options support various mobile payment options and currencies, including the Guyanese dollar and cryptocurrencies like Bitcoin. This would include the recent API integration by Mobile Money Guyana, making it easier for players to deposit and withdraw their winnings. 

 

One of the most common payment options is cryptocurrencies at online casinos, which provide an alternative experience to traditional online gambling platforms. Currently, there is no specific legal framework governing cryptocurrencies and iGaming in Guyana. This overlap between the gambling sector and cryptocurrency presents a unique opportunity for adoption, meaning players can access these offshore online casinos that accept cryptocurrencies as a payment.

 

While cryptocurrency is not considered a legal tender in the country, cryptocurrencies are gaining popularity among both businesses and individuals around the world. This informal acceptance allows crypto transactions to take place without legal barriers. The fast and low-cost transaction execution enabled by digital currencies makes it an attractive option. Typically, traditional payments take some time to process, but with crypto, payments can be executed quickly and within a matter of minutes. This is faster than traditional banks which are often bound by individual banking timeframes. 

 

In addition to facilitating domestic transactions, digital currencies can also be used for cross-border payments, such as remittances, which have an impact on Guyanese families. Businesses and individuals can embrace the benefits of cryptocurrencies regardless of the sender’s or recipient’s location. The element of low transaction fees is even more beneficial for cross-border transactions as they typically incur high fees that discourage trade and commerce.

 

The shift to digital payment technology is not limited to just cryptocurrency and mobile payment transactions. Everyday activities like paying bills, sending money to loved ones, and buying products and services are also changing. The increase in contactless payment options is making transactions much easier for consumers. These digital payment options have been a game changer, particularly in regions with limited traditional banking services.

 

Contactless payments in Guyana make use of Near Field Communication (NFC) technology, allowing residents to conduct financial transactions by waving their mobile devices or contactless cards over compatible card readers. This method offers convenience and speed making it a popular choice among consumers and continues to grow. The digital payments market in Guyana is expected to experience significant growth, with an anticipated annual growth rate of 6.25% from 2024 to 2028. This growth is likely to see an uptick in the adoption of contactless payment methods, as both consumers and businesses look for more efficient transaction options.

 

Contactless payments like WiPay serve as an e-commerce platform and allow Guyanese users to carry out payments without requiring a credit card. Introduced in Guyana on December 13, 2023, WiPay aims to tackle the challenges related to cash-based transactions in a country where credit card usage is exceptionally limited (around 10%). WiPay is designed to cater to both banked and unbanked individuals, facilitating transactions using payment modes such as cash and credit cards. This is a crucial feature in a market where many lack access to traditional banking services.

 

By integrating with existing business systems the WiPay platform simplifies the adoption of digital payments for merchants. This flexibility allows businesses across industries to use WiPay for their financial transactions. WiPay also allows businesses to accept payments from customers regardless of their location, making e-commerce accessible in remote areas of Guyana. 

 

Popular digital payment methods include cross-border remittances. This specific payment method plays a big role in supporting Guyana’s economy by providing crucial financial assistance to numerous households. These remittances serve as an income source for many Guyanese families, contributing to household expenditures and overall economic stability. They help combat poverty and improve living standards by financing education, healthcare and daily needs.

 

Remittance trends to Guyana have shown significant fluctuations. For instance, during the last quarter of 2023, remittances from Canada to Guyana saw a notable increase of over 10%, indicating a substantial flow of funds from the community back to their homeland. However, there was a decline in the total value of personal remittances received in Guyana in 2023 dropping by $100 million (or 65%) compared to the previous year. 

 

Major sources of remittances for Guyana include countries with Guyanese communities in the United States, Canada and the United Kingdom. These funds are often transmitted through banks, money transfer services, and digital platforms. Despite the options for sending money back home, the biggest issue of high transaction fees still poses a significant obstacle. Many families heavily rely on these remittances, and the high costs can eat into the amount they receive. 

 

The regulations governing remittances can be quite complex, with rules that complicate the process for both senders and recipients. This complexity often causes delays and increased expenses. Economic hardships faced in both Guyana and the countries where their community resides can affect the flow of remittances. Factors like job losses or economic downturns in these host countries can result in a decrease in money being sent home.

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• Canada, Digital, finance, Guyana, remittance, United States

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