On August 4, 2020, The E-Money Issuer Order, 2020 (‘EMI Order’) moved Trinidad and Tobago one step closer along the
path to achieving financial liberalisation and innovation thereby making the country an active player in the Fourth
Industrial Revolution. The Fourth Industrial Revolution involves the proliferation of technologies such as,
artificial intelligence and 3-D printing, which rework and blur the boundaries between the physical, digital and
biological worlds.
The EMI Order allows persons other than banks and financial institutions licensed by the Central Bank of Trinidad
and Tobago (‘CBTT’) to issue e-money subject to approval by CBTT. The categories of persons who can issue e-money other than licensed banks and licensed financial institutions are:
-
payment service providers, such as Bill Express, VIA and SurePay, or payment service operators registered with
CBTT; -
money remitters, like MoneyGram and Western Union, registered with the Financial Intelligence Unit of Trinidad
and Tobago (‘FIU’); -
mobile network operators authorised by the Telecommunications Authority of Trinidad
and Tobago, such as bmobile (TSTT) and Digicel; -
technology service providers which are persons who provide hardware and software that allows a payment service
provider to offer payment services or instruments as well as the clearing and settlement of instruments; and -
other financial institutions, such as credit unions, insurance companies and Trinidad and Tobago Unit Trust
Corporation.
What is e-money?
E-money or electronic money is monetary value represented by a claim on an issuer which is-
- stored on an electronic device;
- issued on receipt of funds of an amount not less in value than the monetary value issued; and
- accepted as a means of payment by persons other than the issuer.
In other words, e-money is cash stored in an electronic form. E-money can be card based in the form of pre-paid
cards or smart cards also known as a “wallet”. Alternatively, e-money can be network or software based using
mobile or internet networks and is referred to as “digital cash”. The dollar value of the e-money is held in
consumer and EMIs accounts on servers which are accessible through the internet or a telecommunication system.
Requirements for e-money issuer applicants:
Requirements to be satisfied by e-money issuer applicants include the following:
- Application for registration as an e-money issuer and pay the requisite fees.
- Application for registration as a Payment Service Provider and pay any applicable fees.
-
After grant of approval of registration or provisional registration as an e-money issuer, registration with
the FIU. - Existence as a body corporate with a registered office in Trinidad and Tobago.
-
The applicant, as well as all its directors, officers, acquirers, significant and controlling shareholders,
must satisfy the Fit and Proper Guidelines of CBTT and the Second Schedule of the Financial Institutions
Act. -
The applicant’s business must be directed by a minimum of two persons, at least one of whom shall have the
requisite experience and technical knowledge to direct the EMI’s business activities. -
Satisfaction of minimum capital requirements for example, EMIs which service high value transactions
(payments up to $10,000 per transaction) must maintain at least $1 million or 3% of the outstanding balance
of the e-float, whichever is the greater. -
Maintenance of cash or cash equivalents (assets readily converted to cash) that amount to the outstanding
e-money it has issued. - Must demonstrate effective risk management.
EMIs must conduct the following activities in Trinidad and Tobago dollars only:
- Issuance of e-money account;
- Cash-in;
- Cash-out;
- Provision of payment services; and money transfer of remittances.
Further, e-money accounts can only be issued against cash, debit cards, credit cards or direct debits through
the Automated Clearing House. It is also noteworthy that EMIs are restricted from buying, selling or dealing in
foreign currency. This seems to suggest that payments from overseas cannot be made to local e-money accounts
thereby promoting a closed loop e-money system in Trinidad and Tobago.
In light of the foregoing, the introduction of the EMI Order should reduce the barriers to entry in this space.
Neither do persons need to be licensed banks and financial institutions nor do they need to partner with
licensed banks and financial institutions to become EMIs.
What does the advent of e-money mean for consumers?
Consumers can effect cashless transactions through the use of e-money which would make payments for goods and
services far more convenient than typical modes of payment. Consumers can purchase goods and services easily
using e-money over the internet, with smart cards or their smartphones. Consumers would be able to use e-money
anytime day or night and anywhere provided merchants adopt the use of e-money as effective payment for goods and
services. Consumers would pay merchants quickly as opposed to payment by cheque or bank draft. The use of
e-money eliminates the risks associated with people carrying cash. In addition, transaction fees associated with
e-money payments should be considerably lower than credit cards fees or traditional remittance fees.
Notwithstanding encryption measures for e-money, there are ever present risks from hackers as is the case with
any virtual transaction.
A copy of the EMI Order can be found here.
Article written by Carolyn Fifi