Sabrina Gordon, Business Reporter

There has been a proliferation of automatic banking machines in Jamaica.

The use of cashless instruments is becoming more popular in Jamaica as an increasing number of people search for safer and more convenient ways to conduct financial transactions.

The central bank and the island's two largest commercial banks have released figures showing increased usage of electronic banking systems.

According to data from the Bank of Jamaica, the value of electronic transactions, which includes automated banking machines (ABMs) and point of sale (POS), expanded by over 66 per cent for the three years up to the end of 2006. A total of 40 billion transactions were conducted over the period, valued at $167 billion.

The total volume of funds transferred electronically for the period under review was valued at approximately $22.8 billion.

Increasing transaction volumes

"Transaction volumes have been increasing steadily on a monthly basis as more persons become concerned about the dangers of carrying large amounts of cash," said Joylene Griffiths-Irving, director of public, corporate and government affairs at Scotiabank Jamaica.

"We have seen significant increases in year-over-year use of debit and credit cards," Griffiths-Irving told Sunday Business.

Credit-card revenues at Scotiabank rose 24 per cent to $578 million in 2006, due to growth in activity and transaction volumes on the credit-card portfolio.

The National Commercial Bank (NCB) said it had 1,321,060 debit cards in circulation at the end of May, representing 41.5 per cent of the market.

NCB's earnings on fees and commission increased by $404 million or 17 per cent for the nine-month period ending June 2007. This was mainly attributable to growth in card and other retail banking-related fees that result from card usage.

Scotiabank's other income - which includes commercial and retail banking and foreign exchange trading fees - also increased by $569 million to $4 billion for the end of the 2006 financial year. Retail and commercial banking fees recorded the highest growth, rising 24 per cent to $856 million. This growth resulted from a higher volume of transactions and price changes.

"Scotiabank has experienced a substantive increase in customer demand for electronic services," noted Griffiths-Irving. This comes in light of customers demand for easier and more convenient ways to access financial services while not releasing any stats.

To meet the increase in demand they have increased the number of Automated Banking Machines (ABMs) in the market to over 173 across the island, they have over 100 merchants listed for bill payments on TeleScotia and Scotiabank Internet Banking service.

"We are encouraged by the growing number of customers going for convenience," said Griffiths-Irving.

According to J.E.T.S Limited, the operator of multilink banking network in Jamaica POS transactions were growing at a rate of 240 per cent annually, while ABM grow at about 40 per cent per year.

Multilink user average

Multilink users average over 3.3 transactions per month from ABM and POS terminals islandwide. J.E.T.S said this figure excludes active cardholders who sometimes perform up to 48 transactions per month.

"Multilink has been a great asset for us at NCB, our customers as well as customers of other financial institutions," said Courtney Campbell, general manager of NCB's Retail Banking Division.

"Everyone is now able to use their card on our ABM and Point of Sale networks, which offers additional convenience for all," he added.

According to J.ET.S, which operates the multi-link electronic banking network, the convenience and personal security features of using debit cards instead of cash or cheques has won the support of over 737,000 cardholders. It said 525 new cardholders join the network every day.

The use of ABMs are convenient and beneficial that they eliminate the risk of theft, damage or lost. It also reduces processing fee costs and provides a hassle free environment to customers. But there are also downsides to using ABMs and POS such as when there is breakdown of machines, problems with telephone systems and fraud.