Minister of Finance Marinka Gumbs presented a bill in Parliament (see Tuesday newspaper) to facilitate digital payment services such as Revolut, PayPal and others. This must open the door to a more affordable, modern, secure, competitive and innovative market.
The minister said people on the French side already have more options in this regard. The move is part of the government’s financial inclusion policy, also based on a United Nations (UN) resolution.
She called the first step in that direction approval of a basic banking account last January. However, the related National Ordinance is yet to be published and become law, while the facility did not attract very much interest in Curaçao.
Speaking of which, the same edition carried a story from Willemstad in which the Curaçao Bankers Association (CBA) asked to postpone similar digital payments legislation. According to them, a proposal now on the table could pose risks to the financial system and leaves too many questions unanswered about its impact on customers and financial institutions.
In CBA’s opinion, crucial implementing regulations have not yet been finalised. As a result, it remains unclear how supervision would function in practice and what exact obligations would apply to both traditional banks and new market entrants. They warned that introducing the bill without a complete and clear regulatory framework could increase risks related to privacy and digital security.
CBA also expressed concern that the law could complicate oversight of money laundering and fraud. Curaçao is already under international scrutiny to strengthen its fiscal controls, and additional risks should be avoided rather than created.
Cost is another major concern. Banks expect they will be required to invest heavily in new IT systems and technology to allow third parties access to payment data and customer accounts.
At the same time, they fear that new providers could enter the market without being subject to the same regulatory burdens and expenses. This could result in unfair competition and weaken the position of existing local banks.
Considering that in many cases both Dutch Caribbean countries have the same banks and are united in a monetary union with a shared central bank and currency, all this should not go unnoticed in Philipsburg. Waiting until potential consequences have been thoroughly examined may indeed be the prudent way to go.
