Making the case for real-time payments in CARICOM: Evidence from Jamaica’s economic impact study
Abstract
Fast payment systems (FPS) are revolutionising payment ecosystems globally by enabling faster, more efficient and cost-effective transactions. While over 100 countries have adopted some form of FPS, small-population economies like those in the Caribbean Community (CARICOM) remain underrepresented in both implementation and research. As of 2025, only 2 of the 15 CARICOM countries have launched FPS platforms, and one of these lacks key modern features. This paper addresses this gap through a Jamaica-specific economic impact model that applies a conservative, bottom-up methodology. Using official data from the Bank of Jamaica and global GDP multipliers, the model estimates cumulative direct efficiency gains of approximately US$22.18m over a three-year horizon. These gains stem from the reduced transaction costs associated with real-time gross settlement, automated clearinghouse transfers and debit card payments at the point of sale. The analysis excludes broader non-monetised benefits such as improved financial inclusion, tax transparency and innovation, making it a lower-bound estimate. The paper also benchmarks FPS functionalities in both the Latin America and Caribbean region and worldwide, identifies feature gaps, and offers policy guidance tailored to small economies. The findings serve as a replicable framework for CARICOM policymakers and make a compelling case for coordinated regional action to modernise payment systems and unlock inclusive growth. By implementing FPS, CARICOM countries can begin to realise benefits similar to those observed in many other jurisdictions globally; ranging from cost savings to financial inclusion and innovation. This article is also included in the Business & Management Collection which can be accessed at http://hstalks/business.
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Author's Biography
Mahadevan Balakrishnan is a postdoctoral research fellow at the Indian Institute of Management’s Centre for Digital Public Goods. He has played key roles in the digital transformation of payments in India, notably as Chief Operating Officer of the National Payments Corporation of India, where he oversaw the development of innovations such as IMPS (the platform underlying UPI and the Instant Payment System), Aadhaar-enabled payments, the National Automated Clearing House and the RuPay domestic card scheme. Dr Mahadevan has also worked with the World Bank, advising developing countries on strengthening financial infrastructure and digital payment ecosystems. With more than three decades of experience gained at leading banks and major institutions, he brings deep expertise at the nexus of policy, technology and institutional design. Dr Mahadevan holds an MBA in finance, a master’s in political science and public administration, a master’s in bank management and a PhD in finance and payments. He has written numerous articles for national and international journals and serves on the editorial boards of two leading journals focused on payments and banking. His research interests include payments, particularly fast and instant payments, as well as digital public infrastructure.
