Raphael John-Lall

While the Uni­fied Pay­ments In­ter­face (UPI) sys­tem has been “mas­sive­ly suc­cess­ful” in In­dia and will be ben­e­fi­cial to T&T, there are oth­er types of dig­i­tal pay­ment sys­tems that T&T can use as the coun­try catch­es up with the rest of the world in adopt­ing non-cash sys­tems.

Man­ag­ing di­rec­tor of Pina­ka Con­sult­ing Ltd. based in St. Au­gus­tine, Shi­va Bisses­sar out­lined this view to the Sun­day Busi­ness Guardian, ar­gu­ing that al­though UPI is not the on­ly dig­i­tal pay­ment sys­tem op­tion, it is a start.

“T&T is on the UPI path, which is great. If there is any­thing that ad­vances or in­no­vates re­tail pay­ment sys­tems, it is a ben­e­fit and a plus for the pop­u­la­tion,” he said.

Bisses­sar’s work in dig­i­tal fi­nan­cial ser­vices be­gan with his MSc the­sis at the Uni­ver­si­ty Col­lege Lon­don, ex­am­in­ing bit­coin trans­ac­tion flows. He lat­er con­duct­ed so­cio-eco­nom­ic re­search in­to the ad­vent of dig­i­tal cur­ren­cies in the Caribbean, as pub­lished by the Unit­ed Na­tions in 2016

In 2016 and 2017, he worked with the In­ter­na­tion­al Telecom­mu­ni­ca­tions Union (ITU) to de­vel­op ca­pac­i­ty build­ing work­shops for Caribbean pol­i­cy­mak­ers on dig­i­tal fi­nan­cial ser­vices. He al­so ad­vo­cates for re­spon­si­ble adop­tion of blockchain and dis­trib­uted ledger tech­nolo­gies and as­sists to­wards bridg­ing the gap be­tween pol­i­cy­mak­ers and mar­ket en­trants.

The Cen­tral Bank is in the process of rolling out a mo­bile-to-mo­bile, fast pay­ments sys­tem along the lines of In­dia’s UPI.

Last No­vem­ber, the Cen­tral Bank said a pi­lot is be­ing sched­uled for the first half of 2025 to test the sys­tem in T&T with the aim to have it ful­ly func­tion­al by the end of 2025.

Bissess­er said his com­pa­ny’s core com­pe­ten­cy is in­for­ma­tion se­cu­ri­ty and that al­lows them to have a pres­ence in dif­fer­ent ar­eas such as cy­ber­se­cu­ri­ty and dig­i­tal pay­ments sys­tems.

“We have carved out a niche for our­selves re­gion­al­ly and in­ter­na­tion­al­ly, look­ing at dig­i­tal cur­ren­cies. So, we have worked with the Eco­nom­ic Com­mis­sion for Latin Amer­i­ca and the Caribbean (ECLAC) look­ing at dig­i­tal cur­ren­cies and their op­por­tu­ni­ties and risks in the Caribbean. That was re­search start­ed in 2014, pub­lished in 2016 and why that is rel­e­vant to­day is that we are cur­rent­ly look­ing at vir­tu­al as­sets leg­is­la­tion and reg­u­la­tion in T&T right now. The Cen­ral Bank of T&T (CBTT) and the T&T Se­cu­ri­ties Ex­change Com­mis­sion (TTSEC) put on an event in 2023 en­gag­ing the pub­lic on the top­ic of Vir­tu­al As­sets and Dig­i­tal Cur­ren­cy.”

Cen­tral Bank Dig­i­tal Cur­ren­cies

Bissess­er al­so spoke about work Pina­ka Con­sult­ing has done re­gion­al­ly and spoke about the Cen­tral Bank Dig­i­tal Cur­ren­cy (CB­DC) which is the dig­i­tal form of a coun­try’s fi­at cur­ren­cy, which is reg­u­lat­ed by its cen­tral bank.

“We have al­so done work with the East­ern Caribbean Cen­tral Bank (EC­CB) on their re­tail CB­DC project. The un­der­ly­ing blockchain tech­nol­o­gy can be utilised by a cen­tralised body like a cen­tral bank to is­sue a pay­ment in­stru­ment which is dig­i­tal mon­ey. We here in the Caribbean had the first re­tail CB­DC which was launched in the Ba­hamas, af­ter which Chi­na launched its re­tail CB­DC and lat­er it was the turn of the East­ern Caribbean Cen­tral Bank.”

He not­ed that a re­tail CB­DC is dif­fer­ent to elec­tron­ic mon­ey that a cus­tomer may have in his or her bank ac­count and that elec­tron­ic mon­ey in a bank ac­count is con­sid­ered pri­vate mon­ey, and it is some­thing cre­at­ed by the com­mer­cial bank­ing sys­tem.

“Where­as a re­tail CB­DC is cre­at­ed and is­sued by the Cen­tral Bank and it is a le­gal claim on the Cen­tral Bank and it is com­plete­ly equiv­a­lent to notes and coins. There is a dif­fer­ence be­tween notes and coins and what is held in a per­son’s bank ac­count. What you hold in your hand, that note and that coin, is a le­gal claim on the Cen­tral Bank it­self. Now, we have a dig­i­tal ver­sion of that, which is re­ferred to as re­tail CB­DC. In the Caribbean, we had three op­er­a­tional cen­tral bank dig­i­tal cur­ren­cy projects. These were live projects in The Ba­hamas, East­ern Caribbean and Ja­maica. We worked with the EC­CB giv­en our ex­per­tise in blockchain and dig­i­tal cur­ren­cies. We won the pub­lic ten­der and we served with the EC­CB for five years from 2019 to 2024,” said Bisses­sar.

He then ex­plained how this is linked to T&T’s dri­ve to set dig­i­tal pay­ment sys­tems now.

“The UPI project is part of the re­tail pay­ment sys­tem in­no­va­tion. Just as the East­ern Caribbean did back in 2017 when they de­tailed in their strate­gic out­look re­port, they looked at a re­tail CB­DC as a mech­a­nism to in­vig­o­rate or to in­no­vate their re­tail pay­ment sys­tem. In T&T, we have tak­en a dif­fer­ent ap­proach. We have not tend­ed to­wards re­tail CB­DC, in­stead there is a move to­wards UPI sys­tem. The UPI is part of this whole con­cept of in­stant pay­ment where you lever­age ex­ist­ing play­ers with­in the fi­nan­cial land­scape and you put out this new prod­uct that that fa­cil­i­tates in­stant pay­ment with the clients of the fi­nan­cial in­sti­tu­tions.”

He then looked at oth­er large economies that have rolled out dig­i­tal pay­ment sys­tems.

“So, in Brazil, the in­stant pay­ment sys­tem is PIX. In In­dia, they have UPI, which T&T will now use. The fact that T&T has cho­sen the UPI does not negate the im­por­tance of oth­er sys­tems like re­tail CB­DC. In In­dia, UPI is a ser­vice that they have lay­ered up­on their dig­i­tal iden­ti­ty pro­gramme called Aad­haar, which has rev­o­lu­tionised dig­i­tal iden­ti­ty in In­dia. You can lay­er sev­er­al more ser­vices on top of that and one of these is UPI. Al­though, the UPI is mas­sive­ly suc­cess­ful in In­dia, they still went the route of in­ves­ti­gat­ing and de­ploy­ing a re­tail CB­DC called ‘Dig­i­tal Ru­pee.’”

He sug­gest­ed that in T&T a re­tail CB­DC can al­so be use­ful and list­ed its ad­van­tages.

“I would say T&T is adopt­ing UPI from In­dia. How­ev­er, In­dia it­self has seen the need to not rest on its lau­rels with UPI but have fur­ther ex­pand­ed re­tail pay­ment sys­tem in­no­va­tion to in­tro­duce the Dig­i­tal Ru­pee.

“Some ad­van­tages of a CB­DC over the UPI in­clude ad­vanced pay­ment fea­tures. Things like mi­cro pay­ments, con­di­tion­al pay­ments and of­fline pay­ments. In the case of of­fline pay­ments, should there be an in­ter­net out­age, you can still make pay­ments util­is­ing the funds stored in your dig­i­tal wal­let that is CB­DC based.

“In­ter­op­er­abil­i­ty is a nec­es­sary step if you are of­fer­ing a re­tail CB­DC; it must be in­ter­op­er­a­ble with ex­ist­ing pay­ment sys­tems to fu­el us­age and adop­tion. One use case in par­tic­u­lar is for the pur­pose of a dis­as­ter man­age­ment, where dur­ing dis­as­ters, you may want to dole out funds but you may want those funds to be ex­clu­sive­ly used for cer­tain types of goods. This is where pro­gram­ma­ble mon­ey, an­oth­er ad­van­tage of re­tail CB­DC may come in­to play. Gov­ern­ment to Per­son pay­ments (G2P) and even use cas­es of time­ly VAT re­funds have been some of the in­ter­est­ing re­tail CB­DC use cas­es test­ed glob­al­ly.”

Lo­cal con­tent

Bisses­sar al­so spoke about the im­por­tance of us­ing lo­cal tal­ent and com­pa­nies for the roll out of these dig­i­tal re­tail pay­ment sys­tems.

“Quite nat­u­ral­ly, there are cy­ber­se­cu­ri­ty risks which will have to be tak­en in­to ac­count with any dig­i­tal sys­tem that is be­ing im­ple­ment­ed. This re­quires that you have a com­pe­tent base of pro­fes­sion­als to cater to cy­ber­se­cu­ri­ty with­in your ter­ri­to­ry and ad­vise on cy­ber­se­cu­ri­ty risks on the project.”

He used the en­er­gy sec­tor as an ex­am­ple of how lo­cal com­pa­nies can dri­ve de­vel­op­ment.

“Util­is­ing lo­cal con­tent on such ad­vanced tech­nol­o­gy projects can sig­nif­i­cant­ly con­tribute to a na­tion’s ca­pac­i­ty build­ing. How can we lever­age such projects to si­mul­ta­ne­ous­ly bring ben­e­fit to the pop­u­la­tion of T&T and al­so in­crease its knowl­edge base and ICT com­pe­ten­cies we have here? Akin to the lo­cal con­tent rules we find in the en­er­gy sec­tor, I see the need for sim­i­lar rules for some of the larg­er scale ICT de­vel­op­ment projects that we have in T&T.”

Fi­nal­ly, Bisses­sar said it must be more than the Gov­ern­ment im­ple­ment­ing a dig­i­tal pay­ment sys­tem. It should be looked at as there are now op­por­tu­ni­ties for lo­cal third-par­ty op­er­a­tors to get in­volved and use the sys­tem to grow an ecosys­tem.

“In any re­tail pay­ment sys­tem in­no­va­tion project, it is ide­al to have third-par­ty in­te­gra­tion points from which in­no­v­a­tive use cas­es can be built and of­fered to the pop­u­la­tion. Just to use an ex­am­ple of loy­al­ty points, that is an in­no­va­tion that can be used to dri­ve us­age and adop­tion of a sys­tem, but it re­quires that you have those in­te­gra­tion points. You have to de­sign a sys­tem which en­vi­sions and stim­u­lates in­no­va­tion in the pri­vate sec­tor. This in­tro­duces the ques­tion of en­sur­ing you have ex­perts to co­or­di­nate stake­hold­er con­sul­ta­tion and en­gage­ment with as wide a field as pos­si­ble to en­sure the sys­tem is de­signed to cater for such in­no­va­tion.

“Op­er­a­tional­i­sa­tion will be an­oth­er key area where you will have to re­ly on ex­perts who have ex­pe­ri­ence in de­liv­er­ing re­tail pay­ment sys­tem in­no­va­tion in the Caribbean.”