The passage of the Payment Systems and Settlement bill by Parliament last Thursday is expected to stir up innovation in the financial sector space as Ghanaians move closer to the use of digital platforms for transactions.

Unlike previously where non-bank entities and financial technology (Fintech) companies have to go through the banks to showcase their products, the passage of the Bill, which is expected to receive Presidential assent soon, will give them direct access to the Bank of Ghana (BoG) for licensing.

The Head of Payment Systems at the Bank of Ghana, Dr Settor Amediku, in an interview said the country was going to have a competitive payment ecosystem that would make banks innovate or risk losing their clients to the licensed non-bank entities.

“We are going to see a very competitive payment ecosystem and those who do not innovate, especially some of the banks, will be losing customers to the non-bank entities such as fintechs, mobile money operators and other payment service providers.

“We are also going to see a lot of players in the payment system now.

There are a lot of international institutions interested in operating in our payment systems.

At the end of it, it will create jobs for our people because they have to engage locals,” he said.

The Bill, which was passed by Parliament, would be sent to the President for an assent to make it an Act.

“As soon as we get the assent, our overall objective is to make sure that the government’s payments and receipts, transactions in the economy will be electronic based.

If they are electronic based, it means we will have more people coming into the financial services system and this can help reduce fraud in the payment systems,” he explained.

After it becomes an Act, all mobile money operators are required, within 90 days to apply to the BoG for a licence.

Also, fintechs which operate or want to operate in the financial services system can also apply directly to BoG for a licence.

“It also means that anybody coming to operate in our payment system space must at least give 30 per cent of the shareholding to only Ghanaians.

It also provides the framework for promoting a secured electronic transaction,” he noted.

Dr Amediku added that the new Bill could also help improve the efficiency of government revenue collection as it would be digitised and people in the informal sector could also engage in online transactions using platforms such as mobile money.

“It is going to create the enabling environment for the whole country to make our payments electronic and more efficient,” he said.

Security concerns

Fraud in the mobile money landscape is rife and addressing it, Dr Amediku said, in the Bill, there were laid down provision for cyber security and security of transactions as a result of the licensing by the BoG.

“They need to get international certification such as ISO, Payment Card Industry Data Security Standard (PCIDSS).

Attaining all these standards is going to enhance the security of payment ecosystem because if your system is not certified, there is no way BoG will give you licence”, he said.

Statistics

The 2017 payment systems oversight annual report by the BoG indicated that the value of retail payments (excluding cash) increased by 43.18 per cent to GH¢381.43billion in 2017 from GH¢266.39 billion in 2016.

The growth in the value of the retail payment instruments was on account of increase in the value of mobile money services (98.50%), and e-zwich (45.34%).

The report also noted that mobile money had overtaken cheques as the main non-cash retail payment instrument with 981.6 million volume of transactions, followed by debit card (60.4 million), e-zwich (8.4 million), cheques (7.3 million) and Direct Credit Transfer (6.1 million) in 2017. 

However, in terms of value of transactions undertaken in 2017, cheques continued to maintain its lead with GH¢179.6 billion while mobile money followed closely with GH¢155.8 billion.