ECCB 2023-2024 Annual Report

EASTERN CARIBBEAN CENTRAL BANK ANNUAL REPORT 2023 - 2024

The ECCB is keenly interested in nurturing a payment system environment to attract innovative payment services from non-bank service providers, in the interest of financial inclusion and the reduction in the use of cash.

E nhancing P ayment S ystem and S ervices The ECCB has made significant strides in modernising the payment and settlements system in the ECCU. Over the past 15 years, the payment services landscape has changed dramatically. The ECCB is keenly interested in nurturing a payment system environment to attract innovative payment services from non-bank service providers, in the interest of financial inclusion and the reduction in the use of cash. The existing Payment System Act, 2008 lacks a licensing regime and does not make provision for emerging non-bank payment and settlement services that are being driven by financial technology. There is therefore no explicit legislation under which non-bank payment and settlement services can be licensed to operate. The Payment System and Services Bill was developed in collaboration with the ECCU Attorneys General Offices and was finalised and submitted to member governments in February 2024 for enactment. The Payment System and Services (Licensing) Regulations were drafted and are under internal review. The new legislation will accommodate and acknowledge the full scope of non-bank provision of payment services by defining types of licences; and making provision for the issuance of regulations; consumer protection and financial inclusion and innovation.

The objectives of the Bill are to: 1. introduce a comprehensive licensing regime calibrated to specific risks posed by the activities, through a new modular approach to regulation, that facilitates growth in innovation and financial inclusion; 2. broaden the scope of regulated activities to non-banks to accommodate a wider range of payment services and activities; 3. strengthen consumer protection; 4. engender confidence in the use of electronic payments; and 5. enhance safety and efficiency in the ECCU payment system. The Bill applies to payment service providers including, licensed financial institutions and non-banks financial institutions. In building out the oversight function of the payment and settlements system, the ECCB finalised its oversight policy framework and drafted manuals for: monitoring the payment and settlements systems; collecting, processing and managing information; assessing and managing payment system risks; and onsite examinations, in preparation for the proper oversight of Financial Market Infrastructures and payment service providers.

VIEW - Deputy Director, Financial Sector Supervision Department, Gillian Skerrit, explains the Payment Systems Modernistation Project

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