Accra, Ghana, September 7, 2020//-The devastating coronavirus disease 2019 (COVID-19) is wrecking human and economic havocs across the globe.
But it has one positive effect in Ghana. Masahudu Ankiilu Kunateh explains
Many Ghanaians who used to shun digital payments services previously have developed an overnight acceptance and usage for these services following the outbreak of the COVID-19 and its induced three-week lockdown in March.
The latest Economic and Financial Data from Bank of Ghana (BoG) confirmed that scores of Ghanaians comprising customers and individuals are relying on digital payments channels or services to transaction businesses in this critical time.
It indicated that cash transacted through mobile phones and tablets in the country has increased significantly within the last four-month (March-June) as COVID-19 cases in the country are on the rise.
It added that the total value of Mobile Money (MoMo) transactions increased to GH₵33.8 billion in March 2020, from GH₵23.4 billion, within the same period in 2019.
The data also revealed that between the months of April 2020 and that of April 2019, MoMo transactions had risen by 9.2 %.
Additionally, the country recorded an increase in transactions in the month of May 2020 as against that of May last year.
The Economic and Financial Data released by the BoG in the month of July 2020 also showed that the number of mobile money transactions jumped to 205 million in March 2020, from 156 million within the same period last year.
For the month of May this year, the number of transactions conducted by individuals and businesses also went up. The growth in the number of transactions followed that trajectory in June, this year.
During the three-week of the partial lockdown imposed on Accra, Kasoa, Tema and Greater Kumasi by President Nana Addo Dankwa Akufo-Addo in March this year, majority of Ghanaians used mobile money and other digital payments modes to remit cash to relatives and friends.
ATM transactions for the four-month period under-review were also on the ascendency.
Similarly, payments made by Point of Sale (POS) terminals and others from March 2020 to June this year also saw an increase, according to the data.
For instance, Ms Ayisha Abdulai, a 42-old-year provisions shop owner based in Accra, used to have nothing to do with digital payments products and services but due to the fear of contracting the infectious virus, she has been using the digital payments channels to transact business.
Ms Abdulai told African Eye Report that she goes to the nearby ATM machine to cash-out and cash-in money for her business activities.
Also I spend less time in the banking hall as required by the COVID-19 protocols to use Automated Clearing House (ACH) Direct Credit always to pay my suppliers”. This is her first time of using that product.
ACH Direct Credit is one of the products of the Ghana Interbank Payment and Settlement Systems Limited (GhIPSS), a wholly owned subsidiary of the Bank of Ghana.
It simply involves a debit to an account in the sender´s bank and a transfer of the amount of money directly into the beneficiary´s account in another bank.
This Credit Push instrument can be used for payment of salaries, pensions, welfare benefits, commissions, supplier payments, dividend and refunds, interest payments, government payments, business-to-business payments, among others, according to GhIPSS.
The ACH Direct Credit is secure and reliable service which enables individuals, large and small organisations to make payments by electronic transfer directly into a bank account.
For Nana Kofi Nketia, a 35-year-old building materials shop owner maintained that he abandoned cash-based transactions for mobile payment and other e-payment channels.
This is in line with that the crusade being championed by MobileMoney Limited, a subsidiary of MTN Ghana and other players in that ecosystem system.
The General Manager for MobileMoney Limited, Eli Hini, said: “Today, under the unfortunate circumstance we find ourselves as a people, we realize that our foresight and relentless investment in MTN MoMo at a time when many shied away from the prospects is paying off”.
He continued: “This is because in this period of limited movement, MoMo comes in handy. We therefore encourage the use of MoMo for e-commerce activities, transfer of money to help friends and family, payments for various activities including tithes and offerings, social donations (weddings and funerals) and other forms of financial transactions.”
Drivers
Rising competition in Ghana’s financial technology (fintech) space, sustained mobile money campaign, huge investments, sound IT infrastructure and good regulatory framework are driving innovation and increasing digital payments in the country.
The advent of Mobile Financial Services by MTN Ghana in 2009 with over 15 banking partners has democratized mobile money transactions in the country.
The democratization of mobile money transactions in the Ghanaian economy has instigated a paradigm shift to a new kind of retail banking system where large segments of the unbanked populace are being absorbed into the financial services sector.
With the aim of driving and accelerating the rate of innovation in the space, there are 71 registered fintech businesses operating in Ghana today.
Huge investments
MTN Ghana has made significant investments on the mobile money platform to allow the payment of various goods and services by creating a good number of Merchant outlets across the country that accept payments through merchant ID numbers and QR codes, according to Mr Hini.
New policy initiatives
The government of Ghana in May this year launched three new policy initiatives designed to deepen financial inclusion and accelerate digital payments.
The initiatives are in line with government’s vision of building a payment system that accelerates economic development.
The policies are the National Financial Inclusion and Development Strategy; Digital Financial Services Policy; and Cash-Lite Roadmap.
The National Financial Inclusion and Development Strategy developed in collaboration with the World Bank, aims at increasing financial inclusion from the current 58 percent to 85 percent by 2023; thus helping create economic opportunities and reducing poverty.
The Digital Financial Services Policy, developed in partnership with CGAP, builds on existing technological gains to create a resilient, inclusive and innovative digital ecosystem that contributes to social development, a robust economy and a thriving private sector.
The Cash-Lite Roadmap, designed in collaboration with the United Nations-based Better Than Cash Alliance, puts forward concrete steps to build an inclusive digital payments ecosystem. This includes better access to financial services, enabling regulation and oversight, and promoting consumer protection.
As Ghana’s Minister of Finance Ken Ofori-Atta put it “Digital payments help drive transparency, accountability and efficiency, as well as greater women’s participation in the economy. Moving away from cash helps our country advance toward achieving many of the Sustainable Development Goals”.
In the context of the COVID-19 pandemic, these policies reinforce country’s unwavering commitment to digitising the economy and providing the soft infrastructure that will enable the private sector, payment service providers and all other ecosystem players to innovate digital financial solutions in a conducive environment to the benefit of all Ghanaians.
By Masahudu Ankiilu Kunateh, African Eye Report
