Ghana ripe for Cashlite Economy – Andani

Mr Alhassan Andani, Chief Executive of Stanbic Bank Ghana, says going cashlite may be a way out of the recent spate of robberies apparently fueled by the presence of cash.

According to the President of the Ghana Association of Bankers, only some 20 to 25 per cent of total payments in Ghana are currently done by other means apart from cash.

“Cash is still king and this covers all the physical notes and cheques that are given to individuals and many smaller companies on a daily basis to complete most transactions in the economy,” he said, adding that, cash has always been a source of attraction to robbers.

“Without a pool of cash, there is no incentive for most criminals. To the extent that the reward is large, people will take risks. Once this is removed and not available for easy pickings, no one plans or schemes on how to attack you to collect what you have, thereby reducing the incidence of violence around us,” Mr Andani added.

While Ghana is already on the cashlite route, Mr Andani said, possibly the latest bad news was what might shove the country further down that lane.

“Indeed there are a large number of products and services that the financial sector has rolled out to enable Ghana to go cashlite or the related concept of cashless,” he said.

Cardless ATMs use Smartphone & QRCode

There are currently on the market, products such as cards and Point of Sales devices.

The cards either debit or credit cards, which can be accessed by all customers of banks. There is also a full range of mobile money solutions that allow customers of the telcos to collect or pay money using this channel.

This sector of the economy is a huge mover of money with at least 17 million active mobile money users, a figure that is more than the total banking population in Ghana.

Merchants can collect on so-called soft POSes which allow the merchants to receive money on any internet enabled device. There is also the traditional POS, which helps to eliminate cash transactions by using cards.

In the same segment of the market, there are USSDs that have been deployed for very specific services for some merchants, where each merchant is given a unique USSD string code that their customers can dial and use to pay for goods and services using mobile money.

Another entrant to the market is the ability of allowing customers to fund their mobile money or bank account with their mobile money, helping to take out much cash out of the equation.

Mr Andani said adopting a cashlite economy leads to efficiency in the completion rates of transaction because cashless is almost an instant payout.

“We will have a higher volume of completion of transactions, which will drive efficiency. We will also have less litigation over transactions as the chances for losses are minimal. Cash-lite and therefore more digital payment platforms provide a lot more certainty in transfer of value and receipts. There is also ease of reconciliation because the system is almost self-reconciling,” he added.

To the financial sectors and its customers a cashlite society would largely eliminate the whole industry of managing cash, the cost of which is of no real value add to the sector nor to the customer, not to talk about the security around protecting this cash against people, who are incentivized to attack people for physical notes, Mr Andani said.

Mr Andani said the future of banking and payments had increasingly become personalized, and that, it would be easy to undertake transactions on specific note instruction from clients, driven by data and insight as well as a good knowledge about the customer.

“The future of digital banking will be omnichannel, where customers can start and end the transaction on any device at any place anywhere. They don’t have to go to the branch to get a certain service because they can access all banking services from any device,” he said.

“It is painful to confront the loses recorded recently, but if they become the spark for eliminating an over reliance on physical cash in the Ghanaian economy, those loses would not have been in vain,” Mr Andani added.