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Opinions Mon, 8 Nov 2021

Mobile Money: The chief driver of Ghana’s digital economy - Part 2

This is the second part of the article on the ubiquity of mobile money (MoMo) and how that makes it the main driver of Ghana's digital economy.

In a recent lecture on digitalization, the Vice President, Dr. Mahamudu Bawumia, did more than just highlight the fact that government is confident in the success of the digital transformation agenda because mobile money is now "everywhere you go."

The first part of the article focuses on MoMo Interoperability, MoMo and Ghana.gov, MoMo and GHQR, MoMo and eCedi, MoMo and tax collection, MoMo and Property tax administration and land administration.

It also touched on how MoMo has democratized digital finance and brought real financial inclusion, for which reason the government is rolling out its digital infrastructure confidently. The MoMo story continues.

MoMo, NHIS and e-Pharmacy

What's more - national health insurance registration and driver and vehicle licensing were all done manually and the process was very time-consuming and promoted wanton corruption. Now Ghanaians can register for and or renew their national health insurance status just by dialing short code *929*57# on their mobile phone and following the prompts.

The platform also allows you to pay for the service via mobile money and get an instant receipt. As a result, the National Health Insurance Authority is recording over 70 growth in renewals and 41% increase in new registrations, thanks to mobile money.

Speaking of how mobile money is contributing to the success of health sector digitalization, the government is about to launch another novelty nationwide platform dubbed e-Pharmacy. The platform gives Ghanaians access to all pharmacies, the drugs they have, the authenticity of the drugs, and the prices of drugs in each pharmacy. That way, one can choose which pharmacy to buy from and even request for delivery. Payment can be made with mobile money and receipt will be issued instantly.

The platform also promises to stop drug abuse by cutting out paper prescriptions which people often use several times. Instead of the paper prescription, only a one-time code will be issued for every drug. The viability of the platform is because mobile money exists.

MoMo and DVLA

The Driver and Vehicle Licensing Authority (DVLA) has become arguably one of the best-performing state institutions, thanks to digitalization on the back of mobile money. DVLA used to be a cash cow for middlemen popular known as "goro boys" and their corrupt cohorts at DVLA, who had a very effective bribe network in place until digitalization. Under the old regime, it took months for one to get a single drivers' or vehicle license, even after paying bribes. But now, one can apply for any license online, and pay via mobile money.

Once everything is satisfied, the license will be ready anytime between 24 hours and a few days. And they even have a paid delivery service for those who want it. As a result, driver and vehicle licensing have shot up by 109 percent. A similar situation exists with the passport application, thanks to mobile money.

Ghana's paperless port has been commended on the continent as exemplary. It cuts out the delays in clearing goods at the ports and allows for online filing of documents and digital payment for services, via mobile money.

SIM re-registration

There is a SIM re-registration currently going on in Ghana. Here is what the Vice President said about it:

The SIM cards database is also being integrated with the NIA database. Apart from the demands of the law, it also makes sense to register and link our SIM cards with the Ghana card because most people use mobile money. Mobile money is however susceptible to money laundering and therefore we need a credible Know Your Customer (KYC) requirement because the mobile money account now functions like a bank account.

Again, it is obvious that the insistence on Ghana Card as the only valid ID for SIM registration is mainly because of mobile money. It is targeted at stemming mobile money fraud.

Need I say more to prove mobile money is the chief cornerstone of Ghana's digital economy journey? I will stop here because I just have to stop somewhere. Otherwise, it is easy to find many more mobile money use cases in relation to the digital economy. Today, Ghana boasts of several multi-million-dollar fintech companies, all of whom exist and thrive because there is mobile money in Ghana.

MTN MoMo

JBA believes the mobile money story in Ghana cannot be complete without singling out MTN Mobile Money for special recognition. In fact, it would be a woeful injustice to the mobile money story if MTN is not special mentioned. There are five other players in the space - Vodafone, AirtelTigo, Zeepay, GMoney and YUP - but MTN stands really tall and above them. And JBA is not alone. The MMI platform custodian, GhIPSS singled out MTN for special mention at the launch of the MMI, saying they are grateful to MTN MobileMoney for joining because the platform would not have achieved its purpose without them.

Again, at the launch of MTN's 25th Anniversary, the sector Minister acknowledged that, while MTN was investing heavily into innovations like mobile money, the other telcos just looked on. From the transaction figures she churned out alone, MTN controls about 85% of the mobile money market.

One key purpose of the digital transformation journey is to build a cash-lite society, where digital financial transactions outweigh physical cash transactions, and MTN has, through a spirited commitment to consistent investment and innovation, been driving that agenda for many years now.

Mobile money in Ghana today is successful, largely because of the huge merchant network of almost 400,000 in number. As the mobile money trailblazer, MTN was the one who actually gave the merchants a business to do and the other five players are now riding on the backs of that same merchant network to gain some penetration. The merchants have always admitted that, without MTN, they do not have a business. Indeed, of all the mobile money players, it is only MTN that is available at all merchant points because it is viable to run MTN MoMo. The rest don't get patronized as much, so some merchants are simply not interested.

Reduce fees for consumers

In conclusion, going back to the Vice President's point about not placing additional tax on mobile money service charges, JBA would rather like to see a time when, as Ghana closes in on the cash-lite society target, the government should negotiate a deal that enables mobile money operators to reduce the service charges for Ghanaians as a trade-off for no additional taxes. The benefits should be directed towards individual consumers.

As of now, the various operators have almost negligible service fees for transfers to merchant codes. But P2P transfers, which is the main driver of the huge transaction numbers, still have a one percent service fee. Vodafone Ghana has proved that free transfers or at least reduced service fees is possible.

That should be the direction the industry should go, to drive increased adoption so that operators will recoup their investments on volumes (economies of scale). After all, the operators have, over the years, been promising that as adoption increases, service fees will go down. JBA believes that time is here and now. Let's quit the talk and walk the walk.

Universal merchant wallets

JBA also believes it is time to make merchant wallets universal, such that one merchant wallet will be able to communicate with and transfer money into wallets on all networks. Currently, MoMo interoperability is only at the consumer level. But merchants have to keep separate wallets/phones for all networks. Zeepay, which is not a traditional MoMo player has been able to provide universality of merchant wallet, but that needs to be an industry standard.

It may have its implications for the operators, but in the same way they have crossed the hurdles on many occasions to ensure interoperability on various consumer-centric services, JBA believes they can conquer this as well in the interest of the consumer.
Columnist: Samuel Dowuona