MOBILE MONEY @ 10 - STAKEHOLDER WORKSHOP
DR. MAXWELL OPOKU-AFARI
FIRST DEPUTY GOVERNOR
BANK OF GHANA
THURSDAY, JULY 11, 2019
KEMPINSKI GOLD COAST HOTEL, ACCRA
Honourable Minister of Finance
Distinguished Guests
Ladies and Gentlemen
Good morning
1. Thank you for the invitation and it is a pleasure to join you
today at this workshop which also celebrates ten years of
MTN Mobile Money. The chosen theme "A Decade of
Driving Financial Inclusion and Socioeconomic
Development - The Impact of MoMo" is broadly aligned
with the Bank of Ghana's strategy to widen the scope of
mobile money transactions and in so doing promote
financial inclusion in the economy. Over the past ten years,
MTN has been a pacesetter in the mobile money space
with the introduction of innovative financial products and
services to their clients. I am sure this workshop will
among others provide an opportunity for MTN to share
insights on its successes within the mobile money space.
2. Ladies and Gentlemen, the Bank of Ghana has undertaken
several reforms to deepen financial intermediation and
promote financial inclusiveness for broad-based economic
growth. More recently, the Bank has taken advantage of
the rapid technological advances and widespread use of
mobile money to accelerate the country's migration to
electronic payments so as to expand the scope of financial
services to all and sundry. Consequently, the Bank worked
towards achieving a more diversified financial system
which meets the needs of various consumers and
businesses.
3. The start of these developments dates back to 2007 when
the payment infrastructure was established, that is, the
Ghana Interbank Payment and Settlement Systems. This
was further enhanced with supportive structures such as
the Real Time Gross Settlement System (RTGS), the
electronic Central Securities Depository (CSD), the
Automated Clearing House (ACH) system and Codeline
Cheque Truncation system.
4. Considering the rapid growth in mobile money usage
within the financial system, the Branchless Banking
Guidelines was issued in 2008, and replaced with the
Guidelines for Electronic Money Issuers in 2015 after a
significant policy intervention. This provided the
supportive regulatory environment for mobile money
services kick started partnerships between banks and non-
bank entities including telecommunication companies to
set up subsidiaries to offer mobile money services and
deliver innovative financial products and services.
5. The objective was to leverage on the prevailing high
mobile phone penetration to deliver affordable financial
services to the growing financially excluded segment of
the population. These regulatory interventions incentivised
telecommunication companies to partner banks in the
provision of innovative products, culminating in increased
uptake of mobile money services. The outcome has been
overwhelming and we are currently witnessing rapid
expansion in mobile money usage pioneered by the telcos
and fintechs.
6. Ladies and Gentlemen, recent developments suggest that
mobile money technology has evolved and gained public
acceptance, and in almost a decade, contributed
significantly towards financial inclusion in the country. For
instance, the number of mobile money accounts has
reached 32.6 million in December 2018 compared with 3.8
million in December 2012. Total float balances as at
December 2012 was GH₵19.6 million compared with
GH₵2.6 billion recorded in December 2018.
7. Mobile money has therefore continued to help in
expanding financial services to the unbanked. Currently,
the mobile money wallet is used for domestic transfer of
funds, payment of goods and services, utility bill
payments, salary payments, micro-credit and micro-
insurance services. In May 2018, the payment and
settlements system was firmed up with the successful
implementation of mobile money interoperability. With
this in place, banks can now leverage on the existing
396,599 mobile money agents to reach out to the
unbanked.
8. Also, there are enormous opportunities for banks to
leverage on the over 30 million existing mobile money
accounts to expand the scope and appeal of electronic
payments, offer more innovative payment products that
provide convenience, simplicity and speed at minimal
transaction costs, as well as offer efficient means of
delivering financial services even in the remote areas. This
will further enhance financial inclusiveness, promote the
country's cash-lite agenda, and most importantly, deepen
financial intermediation.
9. To further enhance regulatory environment for mobile
money and other similar innovations within the financial
ecosystem, the Bank of Ghana reviewed the Electronic
Money Issuers Guidelines (2015) and the Payment
Systems Act 2003 (Act 662) which culminated in a new
regulatory framework for the payment systems. The new
law, the Payment Systems and Services Act, 2019 (Act
987) was passed in May this year to further promote the
role of non-financial institutions such as mobile money
operators and other payment service providers in
expanding the usage of digital financial services.
10. Broadly, implementation of the Act is expected to further
liberalize the payment system and pave the way for direct
licensing of fintechs by the Bank of Ghana, and ultimately
facilitate electronic means of payment. In the long-run,
Ghana's new Payment Systems and Services Act should
help improve not only the payments system but also
create an enabling environment for the surging financial
digitization processes in the economy.
11. The Bank of Ghana is engaging the industry and currently
reflecting their views to inform the operationalization of
this new Act. We will be coming out with the operational
guidelines and licensing requirements for FINTECHs in the
next couple of weeks. Views from ongoing stakeholder
engagements will help us to develop a licensing regime
and requirements that allow FINTECHs to operate
independently under this new Act.
12. To promote financial inclusion means we need a flexible
regulatory environment for FINTECHs, in which innovation
is promoted, but at the same time, we are able to strike a
good balance between risks and the level of oversight and
compliance requirements. The Bank of Ghana remains
committed to continuously review regulations to ensure
that they remain relevant and accommodate for advances
in technology and piloting of new ideas, where possible,
by using regulatory sandboxes.
13. The revolution 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. According to the World Bank
Global Financial Inclusion Index released in April 2018,
Ghana's financial inclusion has increased from 41 percent
in 2014 to 58 percent in 2017 mainly on account of
adoption of digital channels such as mobile money for
service delivery.
14. Indeed, the success of mobile money transactions in
advancing financial inclusion cannot be overemphasized,
but there is still scope for further expansion and we need
to focus on areas such as pricing of digital financial
services to promote competitive practices to foster
increased usage. Broadly, market players are seeking to
lower costs and increase access channels to make digital
financial services affordable to the general public.
15. To be successful, electronic payment products should be
affordable and sustainable. And, sustainability requires
leveraging on an enlarged network which supports
payment service providers to build critical mass and
achieve the desired economies of scale. In this regard,
collaborative efforts with the financial digital space to
develop and share infrastructure should be encouraged.
This could be the needed enabler to promote
modernization of the payment system.
16. Ladies and Gentlemen, another equally important aspect
that requires attention strengthening transactions
security to minimize fraud and instil confidence in the
use of electronic payments. Counter fraud measures and
risk management practices should be effective and
proportionate to each service providers risk levels. These
factors would require the attention of stakeholders as
collectively, we progress towards a more cash-lite society
to ensure secured, affordable and convenient digital
financial services.
17. For mobile money entities and fintechs to be successful in
an increasingly competitive payment ecosystem, the
industry needs to have a long-term view and be ready to
build sustainable and affordable electronic payment
solutions that meet the needs of diverse clientele in the
society.
18. I hope this workshop will highlight some of these
discussions and propose directions for further
improvement of digital financial services in the country.
19. To end, let me note that, the Bank of Ghana will continue
to create the enabling environment by removing price
distortions, promoting competition and protecting the
interest of the consumers. Let me say congratulations
once again to MTN and I wish you a successful workshop.
Thank you for the attention.