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Unlocking the Barriers Impeding Ghana’s Digital Payment Systems

Mobile Money Services in Ghana

Accra, Ghana, October 12, 2018//-Rising competition in Ghana’s financial technology (fintech) space, sustained mobile money campaign, sound IT infrastructure and good regulatory framework  are driving innovation and increasing digital payments in the country.

For instance, in September 2016, Ecobank Capital Advisors Ltd., a subsidiary of Ecobank, launched Ecobank TBill4All in collaboration with MTN Mobile Money. Ecobank TBill4All is a self-service digital product that allows Ghanaians to invest in 91-day and 182-day Treasury bills using MTN’s mobile money platform.

Similarly, during the MTN Ghana’s initial public offering (IPO) in which the telecom giantraised an amount of GHC 1.14 billion from the Ghana Stock Exchange, another usage of MTN Mobile Money was discovered.

Out of the 128,152 share applicants,  108,434 of them subscribed through the MTN Mobile Money portal representing 84.6% of the number of applicants.

“This contributed largely to the success of the IPO. As you already know, this is the first time that Mobile Money has been used to buy shares in an IPO (and subsequently trade them) anywhere in Africa or the world over”, the Chief Executive Officer of MTN Ghana, Mr Selorm Adadevoh stated.

He emphasised that the fact that 84.6% of applicants chose to use Mobile Money channel demonstrated another use case for Mobile Money and would accelerate financial inclusion in the capital markets of Ghana, for many people in this country who would not ordinarily have access to the capital markets.

Additionally, in 2014 the Ghana Education Service partnered with MTN to launch “Back to School,” a mobile payment product that allows for the payment of school, college, and university fees.

As of 2016, over 100 schools were using the “Back to School” service, and 5% of MTN mobile money customers used “Back to School” to make school fee payments.

Cash transfer to the beneficiaries of the country’s Livelihood Empowerment Against Poverty (LEAP) programme has been going on the MTN Mobile platform for more than four years  as well.

The programme, is a social cash transfer one that provides cash and health insurance to the extremely poor households across the country. Its main aim is to alleviate short-term poverty and encourage long-term human capital development.

Also, payment aggregators, such as Interpay, Slydepay, and expressPay, FlexiPay and some mobile money providers also offer a platform for customers to conveniently pay school fees to many educational institutions in Ghana with their mobile phone.


Despite a significant growth in various digital payment methods such as cards, e-zwich, and mobile money in the last two to three years, there are several challenges that continue to impact the growth of digital payments in Ghana, according to Ghana’s Ministry of Finance and the UN-based Better Than Cash Alliance  2017 report .

The report titled ‘Building an Inclusive Digital Payments Ecosystems: The Way Forward’ documented the country’s progress in creating an economy where everyone can pay and get paid digitally, instead of cash.

Slow adoption

It noted that; “despite the strong policy push by Ghana Interbank Payment and Settlement System (GhIPSS ) and the Government, the adoption of the e-zwich card has been modest outside of government-to-person (G2P) payments such as salaries and social transfer programmes”.

This is mainly due to the fact that merchant acceptance of e-zwich is low (with less than 1,000 active post of sale (POS) terminals currently) and there is not yet any interoperability with other cards or payment schemes.

Furthermore, although GhIPSS is now rolling out hybrid POS devices, some banks find these to be relatively expensive, due in part to the associated high custom duties/taxes.

Banks are also less incentivized

Industry watchers noted that the banks are also less incentivized to invest in these hybrid devices, as the transaction charges they earn from a domestic e-zwich transaction (0.50 to 1 GHS) are much lower than those from an international scheme such as Visa/MasterCard.

It is evident that both the payments industry and the general population are not currently coalescing around e-zwich, but rather preferring other digital payment options especially mobile money.

A second issue is systemic interoperability of the various payment providers. The growing number of payment aggregators such as expressPay, eTranzact, Zeepay, and IT Consortium have further improved Ghana’s payment infrastructure and, to a certain extent, facilitated interoperability.

These fintech companies have invested in developing platform infrastructure that supports card, mobile, and web (internet banking) payments and offers interoperable person-to-person (P2P) transfers and electronic payments for government services, utility payments, and merchant payments.

Some payment aggregators have also deployed technologies like Near Field Communication (NFC) to make electronic payments more convenient.

The Bank of Ghana (BoG) is seeking to divest approximately 70% of its 100% ownership in GhIPSS to Ghanaian commercial banks while still retaining oversight. These proposed changes to GhIPSS’ shareholding have been questioned by some industry players.

Some MM providers are concerned that this could hinder their ability to connect to the new switch, both from a commercial and/or technical standpoint, as the commercial banks may try to prioritize their interests.

Moreover, some industry players also consider GhIPSS to be more of a competitor (e.g., for merchant acquisition regarding e-zwich) than a neutral payment and settlement platform provider.

The proposed change in ownership of GhIPSS and the concerns of MM providers may have significant repercussions on the feasibility of a truly interoperable payments platform.

Frontier Issues

The financial services and payment landscape in Ghana is already facing competitive pressure from fintech firms such as aggregators expressPay and Zeepay. Although they are not financial institutions, these firms offer competitive services in the payment sector including bill payment, airtime top-up, merchant payments, and P2P transfers.

The BoG has seen the potential these companies offer in terms of increasing innovative product offerings, lowering consumer pricing, and augmenting access for poor populations, and has thus included provisions for regulation of fintech providers in the draft Payment Services and Systems Bill (PSSB).

Although the PSSB is yet to be implemented, the BoG has started the conversation with these entities, having requested that they pre-submit their applications for PSSB authorization, and providing no-objection letters for specific individual products.

The BoG sees fintech as having an important role in accelerating financial inclusion, as well as furthering women’s economic participation in the economy and growth of the economy in general. This approach toward innovation also reflects the government’s general stance toward the adoption of digital payments.

Fake ID cards used for registration of mobile money accounts

The Cyber Security Advisor to the Government, Albert Antwi-Boasiako, noted that not all the national ID cards permissible  for the registration of mobile money account(s) and other digital payment systems  are genuine.

Because of this it is difficult to trace digital payment fraudsters and other criminals in the West African second largest after Nigeria, he added.

In Ghana, the national ID cards which are permitted to be used for the registration of mobile money account(s) and SIM cards are a valid Passport, driver’s license issued by the Driver and Vehicle Licensing Authority (DVLA), National Health Insurance Scheme (NHIS) card, Voter  ID and National ID cards including passports.

But some criminals do cheat these agencies mandated to issue these national ID cards. So some of the ID cards used in the digital payment account registrations could be faked, according to cyber security experts.

Poor customer recourse

The Head of Payment Systems at the BoG, Dr. Settor Amediku identified nontransferable fees, poor customer recourse, insufficient agent liquidity or float and complex and confusing menus as the major challenges to mobile money evolution in the country.

Addressing the barriers

He noted that in a bid to address the challenges of mobile money in the country, the Branchless Banking Guidelines was introduced by the BoG in 2008 which led to the introduction of a model known as ‘Bank-led and many-to-many model.

Subsequently, the Electronic money issuers and agent guidelines was introduced in 2015 which allowed nonbanking entities to use mobile money payment platforms to channel funds to individuals and businesses.

Dr Amediku noted that the nationwide rollout of National Identification system is one of the surest ways to speed up financial inclusion in the country. So, the central bank is lending its support to the national ID card rollout exercise.

To make more people use mobile money, the Chief Officer of DreamOval Limited, DerryDeen Dadzie suggested that telcos should make on-boarding very simple and hassle-free for their mobile money customers.

Touching on how the mobile money operators are addressing the fraud, the mobile money operators said: “Mobile money operators are beginning to intensify mobile money fraud education” to enable reduce or end the canker in the country.

Mobile money in figures

Latest data from the BoG revealed that mobile money subscribers in Ghana have reached 30 million as of June 2018. It also indicated that the amount of money mobilised through mobile money hit record level of GH¢2.3 billion as of December 2017, representing a growth of 84.6 percent over the December 2016 amount of GH¢1.3 billion.

By Masahudu Ankiilu Kunateh, African Eye Report



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