Instant Pay is game changer for banks - GhIPSS

Banks in Ghana could ride on the back of the Instant Pay service to reduce any threat posed by mobile money services, the Ghana Interbank Payment and Settlement Systems (GhIPSS) has said.

The value of mobile money transactions was about GH¢5.85billion out of the total deposit liabilities of 29 banks as at the end of 2015, a figure that is likely to be surpassed by the mobile operators when last year’s figures come out.

Mobile money has become a major platform for financial intermediation with the value of transaction reaching GH¢35.4billion in 2015 representing an increment of more than 216 percent over the previous year. Increasingly, mobile money is becoming a preferred form of internal money transfers particularly involving smaller amounts. The growth of mobile money has been considered a threat to the banks and some of the banks are seeking strategic alliances with telecommunication companies in order not to lose out completely.

The edge that mobile money has over transfers within the banking sector, is the easy access to mobile money outlets and the fact that monies transferred are received instantly and usable by the recipients, while interbank transfers may take at least a day before the recipient could access the money.

However, the introduction of the Instant Pay means that interbank transfers can also be immediate just like mobile money and in this case probably more secured. Additionally, because it can be done via the internet or the mobile phone, it appears even more convenient.

Analysts are therefore suggesting that banks which move fast to adopt the Instant Pay and market it effectively to their customers could be getting back businesses they lost to telecommunication companies and mobile money outlets.

Commenting on this, the Chief Executive of the Ghana Interbank Payment and Settlement Systems (GhIPSS), Archie Hesse said the real time nature of the Instant Pay service was a potential game changer for banks, stating that it could easily become the preferred mode of internal transfers.

He explained that if the public got to understand that they could send or receive money through their bank accounts instantly, they would have little reason to even keep their monies outside the banking sector. Mr. Hesse said the Instant Pay could also increase public confidence in the banking sector because they have instant access to their money though it is lodged with the banks.

GhIPSS has set out to work closely with banks to drive public awareness and patronage for the Instant Pay. Already some banks have developed products on the platform of the Instant Pay and many are likely to do the same in the coming months.

Mr Hesse said as Ghana advances in its payment systems, a lot more efforts will made to encourage people to use more of the electronic forms of payments because it was cheaper, more convenient and gave more value for customers money. He encouraged the public to ask for Instant Pay service from the banks anytime they want to transfer money to another person from their bank