He explained that banks in Ghana are re-inventing themselves and have continued to respond positively to the competitive nature of the payment systems, characterised by increased consumer preferences for convenience and frictionless payment options.
This collaborative effort of a common electronic wallet, he said, would enable economies of scale through the pooling of resources.
By establishing this common GhanaPay mobile wallet, Dr Addison added, the cost of testing any new technology for each bank is reduced and allows new ways of doing business.
Indeed, he said, this is an exciting development for Ghana’s payment systems landscape and demonstrates how collaboration with the banking sector can proffer solutions for the transformation and deepen of the payments ecosystem.
“The banking sector demonstrated its resilience with the ability to offer critical support to businesses and households during this pandemic. The sector’s push for electronic payments, especially during the critical lockdown times, enabled businesses and the public to make and receive payments using digital wallets. We also witnessed the banks’ support to borrowers including moratoria, while ensuring that depositors’ funds were not compromised. These interventions were underpinned by past reforms to strengthen and retool the banking sector, alongside enhanced compliance, and regulatory standards.
“Ghana’s progress in migrating to electronic payments has been laudable. In less than a decade, GhIPSS Instant Pay transactions valued at GH¢420,000 in 2016 surged exponentially to GH¢31.4 billion. In tandem, both the value of mobile money transactions and registered mobile money agents also increased by thirteen and four-folds, respectively.
“Another key development was that Ghana’s cash usage measured by Currency in Circulation as a ratio of Gross Domestic Product (GDP) declined from 6.8 per cent in 2016 to 4.7 per cent in 2021. In addition, Ghana’s cheque usage per capita, which was 25.67 in 2016 declined to 18.9 in 2021.
“The emergence of new business models in the banking sector, together with partnerships with financial technology (FinTechs) companies in offering payment-related services, has also helped to bridge the financial inclusion gap. Beyond the opportunity to compete directly on product offerings and quality of services, the bank-FinTech collaboration would help in the realisation of common objectives and enable participants to achieve economies of scale in the expansion of the payment networks, as well as reach a critical mass of financial inclusiveness in the country.
“This collaboration is commendable and should therefore be sustained since payments represent an indispensable activity for businesses and individuals. Improving efficiency in financial transactions through electronic payments would not only increase productivity but also minimise costs. Beyond this, and at the macro level, migration to electronic payments also has the potential to improve Ghana’s competitiveness and efficiency in cross-border transactions. The benefits from a successful migration to electronic payments in terms of efficiency, gains, and cost savings, are enormous and should be encouraged.
“The launch of GhanaPay is one of such innovations in the financial sector that seeks to address some of the challenges associated with the current bank-centric models by providing an open application that leverages on the network infrastructure of the entire banking industry. With GhanaPay, merchants do not necessarily need to maintain banking relationships with several banks to receive bill payments from other bank customers. In addition, customers only need to maintain an account with a bank to make bill payments to the entire network of customers and merchants registered with GhanaPay.
“GhanaPay, therefore, facilitates resource pooling from the entire banking industry and reduces duplication. It is expected that the industry will be guided by this innovation and continue to retool and respond to the changing environment.”