Industry stakeholders are concerned that a move by light and power entity, Jamaica Public Service Company (JPS) and telecommunication giant Flow to discontinue the use of cheques for bill payments could have a damaging effect on the nation’s small business sector.
The sector represents the nation’s largest employer and holds the highest potential for economic growth. For several small business owners, the use of a cheque was a welcomed alternative to cash or online transactions to make bill payments, but with more utility companies discontinuing this method of payment, the future of their enterprises threatened.
Immediate past president of the Small Business Association of Jamaica (SBAJ), Hugh Johnson, said paying by cheque is safer and less time-consuming for small business owners, who in most cases have to juggle multiple roles because of their small staff complement.
“We are concerned that the small business sector will be mostly hit by this because of our vulnerability and also because we are so stretched in doing all that we need to do for our businesses,” he said.
“That is putting more pressure on an existing dying sector,” Johnson told the Freedom Come Rain newspaper.
JPS had announced that effective September 27, 2023, they would no longer be accepting cheques for bill payment transactions at any of their payment agencies or at their JPS offices from residential or business customers. Flow has since informed that they too will no longer be accepting cheques for bill payments for residential and postpaid mobile accounts effective December 1, 2023.
Both utility companies indicated that the decision was due to an increase in fraudulent activities related to cheque payments.
“We are mindful however, that some of you use cheque payments as your primary payment option, and we appreciate that you may not be as familiar with the range of other payment channels available to you. As such, kindly note that you may find it convenient to do direct bank transfers or wire transfers to JPS, through any of the local commercial banks, building societies or reputable financial institutions,” JPS informed its customers.
But Johnson does not think this option is as convenient or safe as the officials at the utility companies seem to think. For him, it was way more convenient for a business owner to drop off their cheque in a designated drop box. It is also way safer walking around with a cheque than cash to join a line to pay a bill.
“Electronic payment should be easier and we encourage our members to do that, but the complaints we are getting as of late is, they are being attacked, they are being scammed of their money, and the risk is on them, none is on the bank to retrieve it. If there is a discrepancy, your account is locked down, you can’t access your funds until their investigation is completed, which will take forever, so you will be left out of pocket for this duration when the attack has nothing to do with you or is not your fault. The bank is taking zero risks as it relates to that aspect of it, and this is devastating to the business sector,” he pointed out.
Jamaicans have been warned of an increase in cyber attacks. According to the Jamaica Cyber Incident Response Team (JaCIRT), approximately 25,000 attacks were recorded during the first quarter of the year, which grew exponentially in the second quarter to more than 40,000.
“I believe there are more incidents in the cyber world with electronic payment than even with the physical cheque payment. I would love to see the data to be convinced that the cheque payment world is more devious than the cyber world,” Johnson asserted.
Chief Executive Officer of the Consumer Affairs Commission (CAC), Dolsie Allen, shared similar concerns in relation to online banking.
“We are not very pleased with how the banks have been handling some of those cases. In some cases, there are anomalies, and we accept that something went wrong with a person’s account [but] some persons have to wait so long and their accounts are frozen and they can’t access their accounts,” she said before adding, “These are things we have on our to-do list, to meet with the Bankers Association [of Jamaica] to see how best we can resolve to a certain extent or to minimise some of these challenges that our consumers face.”
Even so, Allen said the utility companies are not breaching consumer rights by discontinuing the use of cheques. She noted that while it might be an inconvenience to some consumers, the companies are doing what they think is in their best interest.
“Consumers just have to move with the time. It is a business decision that they have taken and there is no breach of any law that we can say, ‘ok, you have breached the Consumer Protection Act,” she said.
She noted that more and more businesses are discontinuing the acceptance of cheques globally, and are instead promoting online payment options. But one light and power company in India, was forced to retract an order, seeking to prevent consumers from paying their bills by cheque starting from November 1. The Uttar Pradesh Power Corporation Limited’s (UPPCL) managing director had to amend the company’s orders after it came to Iight that the directives was in violation of the Supply Code, which does not impose any restriction on bill payments by cheque.
Chief executive officer of Consumers Intervention of Jamaica, Michael Diamond noted that although a utility company can prohibit the use of cheques, his organisation will be monitoring the recent directives from the utility companies going forward. He said he is concerned about the uniformed approach being adopted.
“This should be analysed by the regulators to ensure it is not some anti-competitive behaviour whereas they are both seeking to do the same thing, implemented at the same time,” he said.
Meanwhile, Johnson hopes that the government will defend the interests of the consumers, who are the ones who will be affected by these changes that did not benefit from consultations with the citizens of the country.