Methods of Payment:
Letters of credit are a common method of payment in Jamaica. Prior to the establishment of a solid business relationship, upfront payment might be a prudent option, although many Jamaicans prefer credit terms. Once a good business relationship has been formed, companies in good standing may move towards trading on an open account. In 2010, the Parliament of Jamaica approved the Credit Reporting Act and in March 2012, the government approved and granted a license to Creditinfo Jamaica, the country’s first credit bureau. A second credit reporting agency Crif NM Credit Assure subsequently received a license. There is also a regional entity, Caribbean Information and Credit Ratings Services Limited (CariCRIS), formed in 2004. Occasionally, U.S. firms register trade complaints for non-payment by local buyers. For more information about the methods of payment or other trade finance options, please read the Trade Finance Guide Trade Finance Guide.
Financial Institutions in Jamaica provide a wide range of personal and business services, including corporate banking. In recent years, banks have been encouraging customers to migrate to internet banking platforms and the restrictions associated with the pandemic have assisted in accelerating this process. Some credit cards issued by local banks are for use in Jamaica only, but international credit cards have grown in importance. The Bank of Jamaica (central bank) regulates deposit-taking institutions, money services businesses (e.g., cambios and remittance companies), and credit reporting agencies. According to the Bank of Jamaica, credit unions are designated by the Ministry of Finance as “specified financial institutions” under the Bank of Jamaica Act, enabling the central bank to obtain information on their operations. Regulations to establish a formal supervisory framework for these entities are being finalized. The Financial Services Commission (FSC) regulates insurance companies, securities firms/dealers, unit trusts, private pension funds, and mutual funds. At the end of 2021, there were 11 supervised deposit-taking institutions consisting of 8 commercial banks, 1 merchant bank (Licensed under the Financial Institutions Act) and 2 building societies. There are 25 credit unions at the end of 2021.
Following a crisis in the financial sector in the 1990s, the GOJ increased the prudential and supervisory powers of the BOJ by passing the Financial Institutions Act and the Banking Act. Amendments were also made to the regulations governing Building Societies. A Banking Services Act passed in 2013 aimed to consolidate regulations. Credit Unions are now designated as ‘specified financial institutions’ under the Bank of Jamaica Act, bringing them under the supervision of the central bank. The Jamaica Deposit Insurance Corporation (JDIC) and a FSC were introduced to protect depositors and regulate institutions and brokers outside the scope of the Central Bank’s oversight. These adjustments have brought the regulatory standards governing the financial sector up to international standards and should therefore aid, rather than impede, businesses.
In May 2022, the Bank of Jamaica (the Bank) introduced a phased rollout of JAM-DEX, Jamaica’s Central Bank Digital Currency (CBDC), while the process to amend the Bank of Jamaica Act (BOJA) progressed. Currently, National Commercial Bank (NCB) offers JAM-DEX through Lynk, its digital wallet. In this regard, anyone with Lynk will be able to transact using JAM-DEX with another Lynk wallet holder. The amendments to BOJA will make CBDC legal tender and enshrine the Bank as the sole issuer.
Foreign Exchange Controls:
Since liberalization of the financial and capital accounts in the 1990s, foreign exchange controls have been removed, but the BOJ still regulates activities in the foreign exchange market. In 2017 the central bank, with technical assistance from the International Monetary Fund, introduced a new tool called the BOJ Foreign Exchange Intervention and Trading Toll (B-FXITT) to improve foreign exchange operations. According to the BOJ, the implementation of B-FXITT is part of its strategy to enhance efficiency and transparency of the foreign exchange market to provide greater assurance about the availability of supplies.
Foreign currency can be accessed through a network of authorized foreign exchange dealers, cambios, and bureaux de change at market-determined rates.
U.S. Banks and Local Correspondent Banks:
Canadian banks dominate the banking sector. Citigroup operates in Jamaica, but it does not offer retail-banking services. The Jamaica National Building Society and Victoria Mutual Building Society are Jamaican financial institutions with offices in the U.S. All Jamaican commercial banks have correspondent U.S. banking arrangements.