Cash Is Costly in the Caribbean, Says Mastercard Study
A study commissioned by MasterCard indicates that nine out of 10 transactions in Jamaica are done by cash or cheques, underscoring the problem of costly informality, according to the global card company.
Jamaica could grow by an additional 0.7 per cent annually the equivalent of around $11 billion more if it reduces cash transactions by 30 per cent over four years, according to the study entitled Evaluating the Social Cost of Cash.
The study conducted by Friedrich Schneider, professor of economics at the Johannes Kepler University of Linz in Austria, features Jamaica, Trinidad & Tobago and Dominica Republic. It similarly concluded that Dom Rep would grow an extra 1.1 per cent and Trinidad 3.6 per cent under the same scenario.
Jamaicans use cash due to informality, but also for convenience, the avoidance of taxes and paper trails, or simply because it bears no fees to the consumer, said the report released last week.
“There is the perception that cash doesn’t bear any cost. But there is a huge cost for the society,” argued MasterCard senior vice-president and general manager for the Caribbean, Gabriel Zuliani, in a telephone interview.