Bahamas Central Bank Looks to Phase Out Checks

The days of paying for things by check in the Bahamas could be coming to an end.

The country’s central bank on Tuesday (Dec. 28) said in a press release it had begun consulting with banks, credit unions and other payment providers on a strategy to “eliminate all use of domestic cheques by the end of 2024.”

The Central Bank of the Bahamas (CBOB) says it will also consult with the public to make sure the plan delivers results that are “efficient, financially inclusive and supportive of further development of the domestic financial system and economy.”

This project follows discussions last year with the country’s Ministry of Finance and Clearing Banks about reducing the use of checks and cash in the Bahamas over the next five years.

Electronic funds and other non-cash alternatives have increasingly begun to replace checks in the island nation, CBOB said.

Meanwhile, the fee structure for electronic settlements favors non-check payments, with the  Bahamas Automated Clearing House (BACH) charging more for check settlements than for other fund transfers.

“The COVID-19 pandemic also fuelled increased demand for non-cash and contactless payments, setting the stage for faster change,” the bank said in its announcement.

“In the meantime, mobile wallet payments are poised for greater adoption, providing more financially inclusive and interoperable substitutes, enabled by the Central Bank’s digital currency, the Sand Dollar,” the bank said.

Read more: Bahamas Central Bank Advances Release of Digital Currency

In May, CBOB Governor John Rolle said the bank has seen progress in a broader adoption of the Sand Dollar.

“We’ve had very good progress,” he told reporters at the time. “What has been happening up to this point is you’ve seen largely a lot of work on the technology platforms of the various financial institutions. Our financial institutions today, the payment providers, quite a number of them have already put their mobile wallets out, which are connected to the Sand Dollar platform.”

CBOB has been pushing for a digital currency due to frustration over banks closing branches in the outer reaches of the Bahamas. The move is also expected to offer more financial inclusion for unbanked Bahamanians and offer a way to transfer funds in the wake of hurricanes or other natural disasters.