New BoG rules excite mobile money vendors

Companies in the mobile money business are in an anticipatory mood for the implementation of a new Bank of Ghana regulation on mobile payment systems, which they contend will help to boost payment transactions using the mobile phone.

The Bank of Ghana, which some time ago embarked on a campaign to drive the economy toward reducing the use of cash in transactions, is set to change its regulatory framework on branchless banking to promote financial inclusion of the unbanked population through retail agents and mobile phones, among other means.

Eric Nsarkoh, Sales & Distribution Executive of MTN Ghana, said attempts by the Bank of Ghana to replace its regulation on branchless banking with that of mobile financial services will help telecom companies fully participate in the financial services sector through subsidiaries that are regulated and supervised by the central bank.

“The regulatory environment is evolving and the central bank is in the process of replacing current regulation on branchless banking with new regulations on mobile financial services that will enable telecommunication companies to set up subsidiaries that will be regulated by the central bank.

“This will boost expansion of the industry and grow cashless payments,” he said.

Mr. Nsarkoh said this last week when MTN held its Mobile Money stakeholder conference as part of activities to mark its Mobile Money Month.

Mobile money, which is relatively new in Ghana, has seen a slow adoption although most of the telecom service providers have invested heavily in the technology and in awareness-creation.

Currently, about half of the six mobile phone operators have introduced mobile money, otherwise known as “M-Commerce”, to their operations as part of efforts to tap into markets previously considered unprofitable by financial institutions.

Other companies such as Afric Xpress and e-Transact Ghana are also riding on the back of the mobile phone’s popularity with the country’s estimated 26 million population, offering various services which allow people to remit money to relatives and friends through the device.

The operations of mobile money operators fit well into the central bank’s agenda to promote cashlite and cashless transactions, thus making it easier for an e-commerce and cashless payment platform to really work in the country.

Last week, the Bank of Ghana unveiled a strategic payments roadmap that it believes will lead to an enhancement of existing payment systems in the country by building on the current payment systems infrastructure engineered by the Ghana Interbank Payment and Settlement Systems (GhIPSS) to reduce the dependence on cash for transactions.

Mr. Nsarkoh said MTN, which pioneered mobile money in the country about half a decade ago, has reported significant volumes of transactions on its platform -- making the company second on the list of mobile money operations within the MTN Group.

He said the mobile network operator, which debuted on the mobile money scene in 2009 with an initial subscriber base of about 5,000 and transaction volumes of approximately 89,000, now boasts of a subscriber base of over 2.5m and a monthly transaction volume in excess of 6.5 million.

“With the low numbers in terms of the banked in Ghana, only 4.5milllion bank accounts, Mobile Money provides a huge opportunity to complement the restricted number of bank branches through the wide agent network that goes into the deepest rural area in the country.

“There are currently over 10,000 MTN Mobile Money agents, established within five years, as compared to 892 bank branches and 1,296 ATMs nationwide, according to the BoG’s 2013 annual report.

“So in terms of reach and access, mobile money significantly complements the efforts of traditional banks and gives customers an opportunity to enjoy services from thousands of agents involved in the chain,” he added.