# Belize launches next phase of payment overhaul

Cheque payments which would have taken up to a week will be processed within 24 hours under new system, with further plans to revamp the securities market infrastructure in the pipeline

The Central Bank of Belize has launched a new electronic cheque clearing system which will form part of its larger Automated Payment and Security Service System (APSSS), allowing for payments to be processed within 24 hours.

The central bank began reforming its national payment system in 2010, when it developed an information system – the APSSS – which connected banks into a data-sharing network.

APSSS allows participants to operate using technologically advanced features and security, including encryption protocols, digital certification and digital signatures, among other security features,” Sheree Smiling-Craig, director of the National Payment System Reform Project, tells Central Banking.

The APSSS went live in October 2016, in collaboration with the government and a number of financial institutions. The reform also led to an overhaul of the legal framework, which now mandates the central bank with overseeing payment and settlement systems in Belize.

Smiling-Craig explains the system provides users with a wide range of payment options through a new electronic funds transfer framework. Low value or bulk payments (including cheques) less than BZ$50,000 ($25,000) are now made through an automated clearing house – payments made through this system arrive within the next day. Low value payments account for 38% of all payments made through the system.

For high value payments, which account for 2% of current traffic, a real-time gross settlement system was established to ensure payments could be transferred within the hour. An instant funds transfer network also allows interbank payments to be made within a few minutes, 24/7.

Cheques make up the remaining 60%, so changes to the cheque clearing framework were a high priority. “This project provides a wider range of payment options and services such as electronic transfer of cheque data and image, new electronic payment instruments and services, and automated clearing and settlement of payments,” Smiling-Craig says.

Under the new system, cheques presented to participant banks before a specific cutoff time, 14:00, will be sent to the APSSS on the same day and credit will be applied at the end of the next day. Cheque data and images sent to the APSSS when the system is open are processed during specific processing windows, Smiling-Craig says.

From July 7 onwards, all cheques deposited will be processed electronically, which will allow for faster clearing times. It previously took three days to process local cheques, and seven days to process those from outside the local area.

Moving forward, the central bank plans to continue to reform its payment system with a new central mandate management system, which will manage customer direct debits, Smiling-Craig says. Plans for a securities exchange law, which would develop regulation of the Belizean securities market, are also in the pipeline.

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