Special Report reveals…Govt. agencies face major challenge in adopting electronic means for payments

May 04, 2018 News

Government agencies and quasi-government entities face significant challenges in their efforts to adopt electronic means to disburse and collect payments.
This is according to a special report on the improvement of the National Payment System in Guyana. The document was prepared by Bank of Guyana in partnership with the World Bank.
The document notes that the issues facing government agencies include the absence of electronic means to conduct interbank transfers of funds, the lack of ability of some banks to offer straight-through-processing of direct deposits, a lack of in-house knowledge and staffing capacity to manage the transition to electronic payments, and a lack of independent advice on how to structure their agreements with the commercial banks to meet their needs for large volume electronic payments or collections.
The report states that Government agencies and quasi-government entities may face the additional challenge of securing the resources to transition to internal electronic processing of payment orders, collections and record keeping.
It notes that the government also faces the challenge of fostering the use of electronic payment instruments and services made available to the recipients of electronic government payments.
It says, “There is a strong tendency of recipients of electronic government payments, especially social benefit payments, to cash-out their funds as soon as the funds are deposited. Payment product design, the availability of points of access to conduct electronic payments and incentive programs can foster greater use of the electronic payment instruments and services made available to the recipients of government electronic fund transfers.”
Additionally, Bank of Guyana officials state that an absence of convenient and reliable means to make electronic payments to the government can pose a significant impediment to the transition electronic payments.
In this regard, the Bank explained that the systems used by Payment Service Providers (PSP), including commercial banks, to provide reliable services for electronic payments to the government, need to have the capacity to capture and transmit key information, such as the taxpayer’s ID, the type of tax, the period for which the tax is paid, along with each payment.
The Bank of Guyana said that coordination between PSPs and the tax authorities (and other relevant government agencies) is necessary, in order to enable the PSPs to make the necessary modifications to the payment systems, and in the case of banks, their core banking systems, to capture and pass on such information to the relevant government agencies.
Going forward, the Bank of Guyana says it intends to support the adaptation of the Finance Ministry’s upgraded accounting system.
It said, “Currently the Integrated Financial Management and Accountability System (IFMAS) prints cheques for payments which are all generated from the Accounts Payable. It is a relatively simple task to convert the cheque printing process to the generation of electronic credit transfer instructions. The Bank of Guyana will work with the Finance Ministry to make this happen.”
Additionally, Central Bank says it will support the adaptation of Customs’ planned ASYCUDA system to receive electronic notification of customs duty payments.
Customs has yet to implement ASYCUDA, but the Bank said it will work with Customs to ensure that the requisite modifications to the ASYCUDA software are included in the implementation of this package.
The Central Bank also intends to implement and track the effectiveness of awareness programs for recipients of electronic government payments and for the collection of government taxes and fees.

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