The Development Bank of Jamaica (DBJ) is launching a new low-cost peer-to-peer (P2P) M3 mobile money transfer and payments service with approved microfinance institutions (MFIs) to target the ‘unbanked’. Alaric, a global supplier of fraud prevention and payments solutions, and Jamaican mobile network operator (MNO) Transcel are also heavily involved in the scheme, which builds on a National Commercial Bank (NCB) project first piloted last Autumn on the Caribbean island, using the NCB’s card services network.
The Mobile Money for Microfinance (M3) project will use the already piloted channel of DBJ-approved microfinance institutions (MFIs) to provide consumers in Jamaica with the capability to carry out P2P mobile money transfers and payments. Transcel will provide the approved MFIs with the facilities to mobile-enable, streamline and integrate lending, borrowing and repayment processes. The National Commercial Bank (NCB) in Jamaica, is also a principal partner in the M3 project, and will provide debit cards linked to M3 accounts, allowing the consumers to access their money through an ATM or a merchant with an approved Point-of-Sale (PoS) device.
DBJ will provide additional banking services and Alaric the security processing and fraud detection infrastructure. In the Transcel M3 platform, additionally deployed for the DBJ, all bank integration and financial transactions are implemented within Alaric’s transaction processing framework, using the vendor’s Authentic and Fractals security products. These will perform account opening and transaction validation checks, manage the balance of those accounts, provide authorisation of mobile transactions and synchronisation with NCB card services switch, and deliver full fraud detection and prevention functions. The Alaric systems will also ensure compliance with all relevant Know Your Customer (KYC), anti-money laundering (AML), and sanctions screening regulations.
In Jamaica, as in many other countries around the world, there is a large unbanked population which has limited access to traditional financial service providers and is typically forced to conduct all transactions in cash. They have to physically store or carry their earnings or remittance receipts, leaving them vulnerable to crime. Lacking access to regulated lines of credit, they are subjected to questionable practices of local money lenders.
“We are committed to bringing more citizens into the formal financial system,” said Milverton Reynolds, managing director of the DBJ. “The DBJ’s role at the heart of this transformative project ensures that many who have been previously excluded will finally have access to modern financial services and will be able to manage their money in a secure, regulated environment. The involvement of a company such as Alaric, whose payments and transactional security products are used by some of the largest financial services companies in the world, gives us confidence that the transactions on the M3 platform will be safe and free from fraud. This will pave the way for all parties to confidently embrace the convenience and cost-effectiveness of mobile financial services - with all the spin-off benefits to business, consumers and the economy as a whole.”
According to Mike Alford, chief executive officer (CEO) at Alaric: “Mobile phones have reached such a high level of penetration in Jamaica [115% meaning some have more than one mobile] that they provide the perfect vehicle to gain access to financial services. The [full-scale] initiative, started by the Development Bank of Jamaica and Transcel, incorporates learnings from other mobile money projects and has been very carefully planned to meet any possible demand.”