Update: The Ferry is being built!
A couple of days ago, I wrote up the following quick piece on the online payments scene in T&T. If you haven’t as yet, I encourage you to read it first.
In it, I did an overview of where we are with our available online payment rails and what the potential path forward is. There are two things I specifically mentioned in that piece, namely that:
- Wipay is one of a few technical solutions on top of First Atlance Commerce, that simply solves just the “Step 2” problem I had outlined
- The likelihood of someone implementing an aggregator model in the current climate is low
Since then, I’ve been directed to information that indicates that this is actually not the case, and that the Wipay team has actually built an aggregator-based service that addresses some of the “Step 1” and “Step 3” problems as well. Put simply, what this means is that through Wipay’s offering as advertised, persons will not have to go through any of the usual hassles and costs of setting up a local online payments solution, and that Wipay has been working on simplifying the technical bits so that integrating them into our various websites and apps becomes much simpler.
Put simply, they’re positioning themselves to be not just the PayPal of T&T, but to be the PayPal of the Caribbean based on how they’ve been representing their services to date.
For now, it seems that the requirements are simply that one has a registered business and an ordinary business bank account. After verifying these credentials with them, persons then have the option of choosing one of Wipay’s integrations (e.g. Wordpress or Magento) or coding up their own solution using Wipay’s API to start accepting payments right away. The details of all this can be found on their website, and their documentation provides ample room for experimentation with their offerings so far.
From this information, it seems that we are on our way to having at least one component of the local online payments conundrum solved!
For the sake of completeness…
In my previous blogpost, I stuck to solely to descriptions of our local payments infrastructure. The reason for this was that it seems that non-local solutions do not integrate easily with our banking system and they pose significant challenges when it comes to settlement of funds.
While this may be true, there are workarounds that small businesses and entrepreneurs can use to leverage non-local solutions and skirt around the settlement problems they present.
The PayPal Route
PayPal has been available to locals for a number of years now, albeit in a very limited capacity. As outlined on their website, T&T nationals may sign up for their service and conduct transactions in any one of the 25 currencies they offer (Caribbean currencies not supported). The tricky part has always been withdrawing these funds, as PayPal’s only supported option barring having a US-based account (from a bank in the US) is to withdraw to a card balance using the Visa network.
Trinbagonians have leveraged the Visa withdrawal option in two ways:
- By withdrawing to VTM cards
Visa TravelMoney or VTM cards are debit cards that can be bought from a local bank and loaded with US dollars. Bank accounts aren’t even necessary to access this service. It has been reported that these VTM cards can then be linked to PayPal and balances withdrawn to them, which can then either be spent directly or withdrawn at an ATM as cash for the requisite fee. - By withdrawing to Visa Debit Cards
This method is very similar to the VTM route where the Visa network is leveraged to withdraw to a balance-carrying card. In this case, Visa Debit Cards are debit cards offered by a number of local banks and are tied directly to a bank account you hold with them locally.
Drawbacks to this route include that funds are usually held for between 21–30 days before they can be withdrawn, and that in some cases there are daily/monthly limits on the amount of funds persons can accept and withdraw at any time.
These introduce significant friction to any business operation past a certain scale.
The Payoneer + Stripe Route
This is a route I first learned of through a friend of mine, Wesley, who wrote about it here.
Stripe is a powerful credit card processing service that is available solely to US-based persons or entities. To get around this, persons can open what is effectively a US-based virtual bank account using Payoneer that they can then connect to Stripe by jumping through a few hoops. Funds processed via Stripe are deposited to the Payoneer virtual bank account and can then be accessed by either:
- Spending via a physical debit card that one can apply for from Payoneer
- Doing a wire transfer from the virtual bank account to that person’s local bank account in T&T
While this is an option that technically works, it is important to note that it is based on the assemblage of multiple loopholes that these systems may not necessarily have been designed for. As such, the route while functional may be too risky for certain scales of business to base significant parts of their operations on.
Stripe Atlas
This route is probably the most stable for businesses that want scalable and flexible solutions for online payments, but it does re-introduce some friction to the setup process. Stripe Atlas is a program very recently started by Stripe to help international persons gain access to the US payments systems and leverage their developed ecosystem to accept payments online in their respective countries.
The end effect is that persons not domiciled in the US end up gaining access to Stripe’s full functionality through legitimate and reliable means.
The catch is that the way this is done is through the setting up of a company based in the US that will process those payments for you. Stripe makes this process very straightforward with all documents and steps streamlined, complimentary accounting & legal advice available, and setup at just US $500. They also set you up with a bank account at the Silicon Valley Bank, and the entire process can be done without ever stepping foot on US soil. The tradeoff though is that at the end of the day you would still have the hassle of maintaining a US company (registered in Delaware) and managing the complexities that come with this e.g. filing taxes in the US with the IRS.
Noteworthy here is that this is a route that I have personal experience with from our last venture at BitBox TT, and it is one that has been a positive experience so far.
Wrapping up
In conclusion, the question of how one may accept a payment online in T&T is by no means a simple one. There are a variety of options available and under development, but we aren’t quite at the point yet where one can write this off as a foregone conclusion and focus on building out their actual product/service.
Patrick Collison (Stripe co-founder) puts it well when he says that the aim of a good payments solution is to “reduce the activation energy required to get online”. By this metric we are still some ways off, but with time and effort from our local innovators we should hopefully see this gap closing in the short-to-medium-term so that local folks can move on to being able to easily & fully participate in the internet (and by extension global) economy.
