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Kanoo touts digital payment solution that doesn’t require internet connection

Kanoo Pays has invested in near-field communication (NFC) technology that allows users to transfer funds between two NFC-enabled card devices and does not require an internet connection. The investment is part of the mobile wallet company’s continuing bid to transform payment systems in The Bahamas and worldwide.

The company’s co-founder and Chairman, Nicholas Rees, wrote in an article on the website Next Billion – an online magazine and forum for business development – that the technology will allow users to conduct payment transactions seamlessly without the need for an internet connection, thereby solving specific connectivity and financial inclusion issues faced by countries in the region.

“For individuals in remote islands with limited access to banking services, a digital wallet eliminates the need to hold and carry cash,” said Rees.

“Users can easily access their funds and make purchases at merchant locations across the island, creating a closed-loop environment that promotes financial inclusion. Moreover, since a digital wallet can be linked to traditional bank accounts, it can ensure accessibility even in areas where ATMs are scarce.

However, digital wallets face some limitations in the Caribbean. In particular, a lack of reliable high-speed internet connectivity, especially in rural areas, has been identified as a factor hindering the widespread adoption of digital banking services in the region. For that reason, in areas with patchy internet connectivity, offline payment capabilities are essential for ensuring continuous access to financial services.”

He added: “We have invested in revolutionary technologies that provide these offline services by enabling physical card-to-card payment transactions.

“These cards utilize near-field communication technology to allow users to transfer funds directly from one card to another, without using a bank as an intermediary.

“Along with the cards, at least one mobile phone is also necessary, with our app acting as a terminal where users can type in the transfer amount, but the technology works with or without an internet connection. By managing an offline ledger, we ensure that users can conduct transactions seamlessly, regardless of internet availability.

“This capability represents a crucial last step in closing the gap for complete end-to-end adoption of digital financial services, particularly in remote island communities.”

Rees explained that central bank digital currencies (CBDCs) like the local Sand Dollar have the potential to transform financial systems and promote economic development and financial inclusion across the region.

Prime Minister Philip Davis recently concluded that with the growing relationship between The Bahamas and African nations, there is an opportunity for cross-border transactions between countries that are faster and less expensive than traditional bank payment options like wire transfers.

Rees said despite the advancements, there remain roadblocks to universal adoption of the technology.

“Despite the promise of digital banking solutions, the road to widespread adoption of these services in the Caribbean is obstructed by significant barriers, notably a lack of awareness, understanding and trust among potential users,” he said.

“Overcoming these hurdles demands a concerted effort from companies operating in the digital banking space.

“The lack of awareness is a function of a wider deficit of financial literacy in the region — something both governments and fintech leaders have a duty to ameliorate. In The Bahamas, fintechs like ours have embraced a proactive approach by integrating educational and awareness campaigns into our business model, creating or partnering with organizations dedicated to education and training in the technology and financial sectors, and hosting events such as free public workshops and training sessions.”