Jamaica’s Automated Banking Machines (ABMs) are undergoing a significant transformation, increasingly catering to the daily financial requirements of residents. Recent insights from JETS, the operator of the MultiLink network, reveal that more than 83% of all ABM transactions involve withdrawals of $25,000 or less. This trend highlights a strong preference for small-value cash transactions across the island’s banking landscape.
A closer analysis of the data shows that 42.46% of withdrawals fall between $100 and $5,000, while 40.49% range from $5,000 to $25,000. These figures indicate that Jamaicans predominantly use ABMs for routine cash needs rather than for large-scale withdrawals, reflecting a shift towards more manageable and frequent transactions.
Edmundo Jenez, CEO of JETS Limited, explained that the emphasis on smaller withdrawals was instrumental in the decision to lower the maximum withdrawal limit to $100,000 last year. “Our customers primarily seek modest amounts of cash for their everyday activities,” Jenez stated. “We needed to balance their needs with the operational capacity of our ABMs to prevent frequent cash shortages.”
Despite the overall reduction in withdrawal limits, individual banks retain the authority to set their own limits on proprietary machines. Jenez noted that while the $100,000 cap has eased the demand on the ABM network, a very small percentage of users still require larger withdrawals. These high-value transactions represent less than 2% of all ABM activities, underscoring their minimal impact on the broader system.
The move to limit large withdrawals was also driven by the technical constraints of ABMs, which can dispense up to 40 notes per transaction. Large withdrawals quickly depleted machine cash reserves, necessitating a reduction in limits to ensure machines remain operational for the majority of users. “People needing large sums now have to seek alternative methods for accessing significant funds,” Jenez added.
In recent months, the reliability of Jamaica’s ABM network has seen marked improvements. By the end of October 2024, 855 out of 900 installed machines were operational, achieving a 95% functionality rate—well above the central bank’s minimum requirement of 90%. This enhancement has significantly reduced the frustration caused by out-of-service machines, a common issue faced by customers in the past.
The shift towards smaller transactions is also influencing the types of banknotes dispensed. Inflation has decreased the purchasing power of lower-denomination bills, prompting ABMs to favor higher denominations such as $500, $1,000, $2,000, and $5,000 notes. As a result, the use of $100 bills is rapidly declining, with only 66 ABMs still dispensing them as of October 2024. Jenez anticipates that lower-denomination notes will be completely phased out from ABMs within the next year.
The Bank of Jamaica has played a crucial role in these developments, setting new standards for deposit-taking institutions (DTIs) to enhance the ABM network’s efficiency and reliability. Jide Lewis, deputy governor of the Financial Institutions Supervisory Division, confirmed that most DTIs are on track to comply with these standards by the first quarter of next year, despite some delays caused by Hurricane Beryl’s impact on operations.
Additionally, the ABM network has improved its service recovery times, reducing the average downtime from six hours to three hours. While this is a positive step forward, there is still progress to be made in achieving optimal recovery times, particularly in rural areas where the current average is three hours compared to the targeted one hour for urban locations.
Overall, Jamaica’s ABM infrastructure is evolving to better meet the everyday financial needs of its citizens. By prioritizing smaller transactions, adopting higher-denomination notes, and enhancing operational reliability, the ABM network is becoming more efficient and user-friendly, aligning with the island’s economic and logistical demands.
