Abstract

Trinidad and Tobago is a high-income oil producing Caribbean economy that has been transitioning from the sole reliance on cash for payment, but analysis on the use of electronic payment services remains mostly unanalysed. A slow adoption rate can be a result of voluntary or involuntary financial exclusion if individuals in society choose not to access financial services or are stymied from fully accessing services. The data reveal that despite 81% bank account ownership, there were no deposits or withdrawals made from 19% of the accounts in 2017. Additionally, of the 63% debit card and 19% credit card ownership, card usage only accounted for 14% of GDP; with only 41% indicating the use of a debit or credit card to make a purchase in the past year. As such, this paper examines the use of electronic payments in Trinidad and Tobago and investigates its determinants. The parsimonious Ordinary Least Squares model suggests that financial deepening and increases in the younger proportion of the population are associated with higher use of electronic payments, while the share of the level of employment in the agricultural sector is associated with lower usage.

Key words: Electronic payments, developing economy, Trinidad and Tobago, financial exclusion.