GOVERNMENT says it could save as much as $266M annually or 0.4 per cent of the country’s Gross Domestic Product (GDP) if it switches from paper-based payment mechanisms to electronic payments.

This was announced by Bank of Guyana Governor, Dr Gobin Ganga who recently told reporters that the Central Bank will be embarking on a comprehensive and strategic modernisation of the country’s National Payment System to advance the use of electronic payments.

With assistance from the World Bank, he said the Bank of Guyana will play the lead role in the project albeit with “active cooperation” of major stakeholders.

The Government, Dr Ganga noted, is a major stakeholder as it is the single largest end-user of payment services. The Ministry of Finance, The National Insurance Scheme (NIS) and the Ministry of Social Protection all manage the largest of the outgoing payment programmes in the country, while the Guyana Revenue Authority (GRA) and NIS, both quasi-government agencies, manage the largest inflows.

Other stakeholders include Commercial Banks, Money Transfer Agencies and the Business Community.

“Excluding revenue collection, the programmes managed by the Finance Ministry, NIS and Ministry of Social Protection account for an estimated 260,000 payments a month, a daily average of over 11,000 and over 3M annually.”

Over the next four years, the Governor said the Bank will undertake payments system regulatory reform and infrastructure development to achieve several objectives, including but not limited to the establishing of legal clarity and certainty to cover several areas such as electronic funds transfer, e-money and cheque truncation; enhancing efficiency of payment processing and reduce settlement times for both retail and large value transactions; strengthening risk management and mitigation across the National Payment System; expand accessibility of electronic payment across networks; attract higher rates electronic payment acceptance by vendors, merchants and other providers of goods and services; drive remittance costs down and enhance accessibility of remittance services; strengthen oversight framework and capacity; build stakeholder engagement and cooperation and support e-commerce.

A 2015 payments cost study conducted by the World Bank’s Payment Systems Development Group (PSDG), shows that based on all indicators, once successfully implemented the programme can lead to significant benefits in several areas.