Payments System

A vital part of Belize’s financial infrastructure, the payments system facilitates the discharge of financial obligations and the safe transfer of funds across distances and institutions.

The Central Bank of Belize recognises that a safe, reliable and efficient payment system is central to the stability of the financial system. A developed payment system links financial institutions and payments and securities settlements systems and is underpinned by robust legal and regulatory framework. The essential components of a developed payments system are:
     • Automated Clearing House (ACH) for processing of retail (small value)
       transactions,
     • Real Time Gross Settlement (RTGS) for large value transactions
     • Securities Settlement System (SSS), and updated legal and regulatory
       framework.

Belize’s Payments System
Non-cash payment instruments currently used in Belize include cheques, debit cards, credit cards, and direct credits.  Three main electronic payment mechanisms are used in Belize:  the POS and ATM networks that facilitate payments by debit card and credit cards; direct credit facilities to make bulk payments such as salaries and pension; and online bill payment facilities.

Commercial banks’ POS/ATM mechanisms are not connected via a local network but are interoperable through an international network. Without an Automated Clearing House (ACH) to connect financial institutions, customers can only make electronic funds transfers such as direct credits, direct debits, and online payments on an intrabank basis.

The cheque is the primary non-cash payment instrument used in Belize. The cheque clearing system facilitates the deposit of cheques to any bank, not just to the bank against which it is drawn. However, the system is totally manual which increases its processing cost and settlement time, currently three days for district and seven days for out district cheques.

Payments System Reform
To improve this critical pillar of the financial infrastructure, the Central Bank of Belize has been involved in various reform activities over the past few years. A World Bank assessment of the current payment system found that there is a need to increase the safety, efficiency and integrity of the payment system through implementation of a modern payment systems infrastructure. It should include measures to address liquidity, credit, operations, and legal risks in accordance with international standards.

The World Bank is providing technical assistance for a national payments system development plan and legal and regulatory reform. The development plan will determine a suitable and cost effective design for Belize’s payments system.