Mobile money now leading non-cash payments platform

Data released by the Bank of Ghana last week reveals that mobile money is now the leading platform for payments in Ghana outside of cash itself.

During the first half of 2018, not only were more payment transactions executed through mobile money than through any other type of non-cash payments platform, but mobile money became the biggest form of payments platform in terms of value of transactions too, replacing the erstwhile leading channel, cheques in this regard.

Between January and June this year,655,002,089 transactions were done through mobile money, valued at a total of GHc104,602.36 million, which was higher than the GHc99,374.53 million worth of transactions done by cheque for the first six month reporting period ever.

This completes mobile money’s ascendancy to the top of Ghana’s non-cash payments platform industry, which began in 2017 when it overtook cheques with regards to the number of transactions channeled through it. Instructively, during the first half of 2017, cheques accounted for GHc84,197.21 million, well ahead of the GHc68,230.67 million in payments made through mobile money.

Mobile money’s overtaking of cheques as the leading form of non-cash payments has been on the cards for some time now, with a much higher growth rate in terms of value transacted than cheques.

Indeed this trend continues with the value of mobile money transactions growing by 53.31% during the first half of 2018 over the corresponding period of 2017, while the growth in value of payments by cheque being much slower at 18.03%.

This suggests that mobile money’s newly achieved dominance over cheques in terms of value of transactions is likely to increase further growing forward.

The new data, as contained in the Bank of Ghana’s latest Payments Systems Report, indicates that there is plenty of room for further growth in the mobile money market.

The number of active mobile money accounts only grew by 24.29% during the first half of 2018, which is less than half of the growth rate for value of mobile money payments.

However it is instructive that active mobile money accounts – 11,797,476 by end of June this year – were barely 37% of the 29,988,590 registered accounts. Even more instructively those active accounts – defined as accounts on which transactions were executed not more than 30 days before the reporting date – were just 31% of the 37,445,048 registered voice telephony subscriptions, implying that mobile money accounts have the potential to triple over the coming couple of years.

This growth potential could be actualized by the introduction of mobile money interoperability in May this year, which enables transactions between subscribers on different platforms.

While there are three platforms currently – MTN, Vodafone and AirtelTigo respectively – MTN has clear market dominance with close to 93% market share, this having arisen because hitherto, transactions between different platforms was not possible and so subscribers overwhelmingly opted for MTN where most of the other mobile money subscribers are.

Now however interoperability has made mobile money so much more attractive to subscribers who do not want to be on MTN’s network.

However, transactions across different networks have only started growing slowly; between the first two months of interoperability, only 287,822 transactions were done, worth GHc25.36 million in value, these accounting for less than 0.1% of total mobile money volumes and values.

As they pick up though, mobile money’s new dominance as a non-cash platform will intensify further.