Home' Trinidad and Tobago Guardian : May 2nd 2013 Contents MAY 2013 • WEEK ONE www.guardian.co.tt BUSINESS GUARDIAN
NEWS | BG7
Declaring that the Latin American market
is a lucrative opportunity for growth Jeff Wil-
son, president of the GeoCentral Division of
MasterCard, said young adults starting their
first job are a promising target for Mastercard,
especially in the T&T market.
"Total penetration of electronic payments
and total family consumption is about 15 per
cent, so 85 per cent of all purchases are made
either in cash or in cheques, so that's a huge
opportunity for growth, globally and specif-
ically in the Latin American and Caribbean
region. Those numbers are similar, even here
He added: "If we compare 2012 with 2011,
total purchase transactions grew over 22 per
cent year over year, so that's very healthy
growth in a world that still has 85 per cent
The young working population is not the
only business which Mastercard is targetting.
"You have a ferry here that carries hundreds
of people every hour. That kind of service
would allow for cash. Replace cash with an
electronic payment. Think how secure it would
be for the consumer not to pay cash, for a
cashier not having a cash register full of cash,
for the ferry company not having to transport
the cash and for the bank not having to send
Wilson said it would even make it easier
for collecting taxes.
Referring to the T&T market, Wilson said
T&T is one of the largest markets in Mas-
tercard's GeoCentral Division, which comprises
Venezuela, Ecuador, Columbia and the
Caribbean islands. The T&T market is so huge
that Mastercard had to increase resources.
Having studied the market, he described the
average customer as one who embraced tech-
"We are implementing chip (technology)
in the market, one of the first ones in the
Asked how much funds Mastercard plans
to invest in T&T, he said it is not Mastercard's
policy to disclose how much is being invested
in the target market as competition is swift,
but said more money is being invested than
"When we look at the potential for growth
of electronic payments, T&T has doubled the
size of electronic payments since 2006. If you
look at 2006, 2010, for example, T&T payment
industry has doubled in terms of transactions,
in terms of volume. Not every market has
that growth level."
War against cash
It's a war against cash, said Andres Gon-
zalez, vice president, tertiary head, Eastern
"Our focus (in the T&T market) are in gen-
eral products---credit---but specifically in debit
products and in prepaid products. There is a
lot of opportunity around financial inclusion,
around work that can be done in terms of
social services (Government's food card ini-
New products coming into the T&T market,
Gonzalez said, include mobile applications to
do credit card transactions. Regarding trends
on how the customers would settle their credit
card debt, Gonzalez said: "We let the banks
take those decisions and policies with the
way they want to work with interest rates
and all types of regulations.
"We are not really involved in how the port-
folios (suite of credit cards) are managed.
Overall, consumers are very up to date with
Wilson said there is the possibility of delin-
quent customers, but this can be controlled
by providing information to the customer
about their balance.
The credit limit provided to the customers
are determined by the banks, not Mastercard.
"We are seeing e-commerce as a very big
and growing channel. We are seeing positive
trends in terms of consumers embracing e-
commerce in Latin America and in the
Caribbean in general."
In order to deepen its footprint in the e-
commerce business, Mastercard has partnered
with merchants, namely: Trinitrolley, Super-
Pharm, TruValu and Ruby Tuesday.
The biggest challenge for Mastercard is to
increase the credit card transactions and
decrease cash transactions.
According to Wilson, chip technology should
"It is a safe technology. In Latin America,
we have more than 140 million cards converted
to chip. We have ten more countries that are
rapidly adopting the chip technology, including
T&T. It's a balance between us wanting to
embrace a technology which is safer and our
clients also wanting to embrace the technology
He said information can be included in the
chip which Mastercard plans to use as "a
"Expansion of the market means strategic
marketing techniques. The approach for Mas-
tercard in the T&T market is to convince the
consumer its services are superior."
Five months after Scotiabank launched the
sale of gold certificates on the T&T market,
the bank executive in charge of the product is
reporting good response from local investors.
Without confirming the exact number of
investors in the gold certificates sold by Sco-
tiabank in T&T, Savon Persad, the bank's senior
general manager, retail and small business said
the number was in the hundreds.
Available at all its branches, gold certificates
according to Persad, is a "claim on unallocated
gold, that is, a claim on the assets of Nova
Scotia. What we sell are those certificates that
actually represent a claim on the assets of Sco-
There is no cap on how much can be invest-
ed. In the first instance, the investor can invest
ten ounces at a rate which is offered in the
international community. Later, the investor
can purchase above that amount in increments
of one ounce.
According to the ScotiaMocatta Web site,
gold cost US$1472.00 per ounce on Tuesday.
The commodity is volatile as on April 15,
gold posted its biggest one-day percentage
drop in 30 years amid new signs of a global
economic slowdown and fears diminished that
central banks' easy-money policies would stoke
inflation, according to the Wall Street Journal's
Web site. The April 15 price of US$1,360.60
an ounce on the Comex division of the New
York Mercantile Exchange extended a bear-
market descent of more than 20 per cent from
its 2011 all-time high.
Persad explained if an investor opts for trad-
ing in bullion, as it is called, or in other words,
gold or silver in bulk before it is coined or
valued by weight, he or she must take into
consideration the shipping and trading costs,
physical storage and security issues.
This means it may not be too attractive to
this market due to high crime and extra costs
involved in securing and shipping it, therefore,
the bank opted to trade using certificates.
"The advantages of the certificates is that
they are convertible to physical bullion, it can
be done at a branch in Canada. We don't do
the actual physical conversion to bullion in
T&T. Really, what the certificates represent is
an alternative investment for the investing
He tells investors gold is an alternative to
diversify the investor's portfolio of investments
and offer protection against "fluctuations asso-
ciated with any single asset group. There are
other advantages to having it in a portfolio,
it's a good inflation hedge. It's also a good cur-
rency hedge, particularly against the US dol-
Declaring that investing in gold certificates
is less volatile than most commodities and
many of the equity indices, Persad said it holds
its value over a very long period of time.
"We sell at exactly the price that would sell
at the international market, through Scoti-
aMocatta in Canada, who is the market maker
or price maker for gold because they are part
of the London gold market fixing Ltd."
ScotiaMocatta is an affiliate of Scotiabank
and is one of the largest traders of precious
metals in the world. One of the products Sco-
tiaMocatta offers to the public is gold and they
also trade in other precious metals, including
gold silver, platinum and palladium.
Though gold may be less volatile than most
commodities, it cannot be used as collateral to
secure a loan.
"Gold is not a security and is considered more
of a commodity. It is something that we may
be thinking of in the future but, at this point,
we are not using gold as any sort of collateral
to secure any sort of lending," Persad said.
He explained that gold is not a security and
is not considered a security like equities or any
type of bond. It is a precious metal. Investing
in gold gives the investor more investment
go for gold
senior general manager, retail and small
business, Scotiabank T&T Ltd.
PHOTO COURTESY SCOTIABANK T&T LTD
Mastercard exec: T&T's market one of the largest
Jeff Wilson, president, GeoCentral Division of
MasterCard. PHOTO: ROBERTO CODALLO
Karrian Hepburn, left, general manager, Scotia
Investments T&T, with Anya Schnoor,
managing director, Scotiabank T&T, unveil a
larger-than-life sized Scotiabank gold
certificate at the launch of the bank's new
product, Gold at Scotiabank's hospitality
suite, Queen's Park Oval.
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