The Vice President, Dr Mahamudu Bawumia, who was also the former Deputy Governor of Bank of Ghana, has stated that the ground breaking mobile money interoperability system implemented under his able watch has fought financial exclusion in the financial sector.
Delivering a public lecture at the Ashesi University, the Vice President noted that one of the biggest problems impeding financial sector development in developing countries, is the issue of financial exclusion. He stated that, thanks to the interoperability, it is now possible to send money digitally across different platforms.
“When we assumed office in 2017, we decided to use digitization to solve this problem. The data showed that 70% of people in Ghana had no bank accounts but 80% of the adult population had mobile phones with 30 million mobile money accounts.
“It was also not possible to send money to customers of different telecom companies. So we asked the questions: why can’t we make it possible to send mobile money across different telecom companies and also why can’t the mobile money account function like a bank account ‘by making it interoperable with bank accounts?
“The answer to these questions was the implementation of the ground-breaking mobile money interoperability system.”
Dr Bawumia
The Vice President explained that most of the population is excluded from fully participating in the financial system because they are unable to open and operate bank and financial services accounts. This, according to him, reinforces the dominance of cash payments. Nonetheless, he said even those without bank accounts are now doing financial transactions.
“Thanks to the Bank of Ghana and Ghana Interbank Payments and Settlement System (GhIPSS), the mobile money payments interoperability has made it possible to transfer money seamlessly across different mobile money providers and between bank accounts and mobile wallets. It has also solved the major problem of the over 70% of people not having bank accounts.
Dr Bawumia
Ghana Leading the Rest of African Countries in Interoperability
“Today, because of mobile money interoperability (MMI), you can transfer money from a customer of one Telco to a customer of a different Telco, and also make payments from your mobile money account into any bank account and you can receive payments from any bank account into your mobile money account.”
Dr Bawumia
Dr. Bawumia further acknowledged the interest payments on savings on mobile money. He lauded Ghana for being the torchbearer for such a technology in the Sub-Saharan Africa
“You can receive interest on savings, acquisition of loan (e.g. qwick loan) on your mobile wallets. As a result of MMI over 90% of the adult population now have access to a ‘bank account’.
“Ghana is the first country in Africa and one of the few in the world to achieve this type of interoperability between bank accounts and mobile wallets. I would like to note that even in the USA, the Federal Reserve Bank does not have interoperability in its Real-Time Payments Network. The American Bankers Association in a letter to the Fed in September 2021, called on the Fed to strive towards interoperability with the Real-Time Payment Network.
Dr Bawumia
Ghana is the Fastest Growing in Momo Market
The Vice President observed that achieving mobile money interoperability (MMI) in Ghana no small feat, especially at the cost it was done. The data shows that because of MMI, Ghana is the fastest growing mobile money market in Africa. He revealed that the total value of mobile money transactions in 2020 was GHC570 billion ($100 billion). Six years ago, it was GHC35 billion.
The Former Deputy Governor of Bank of Ghana disclosed that banks in the country will launch an app to help move money freely at reduced charges.
“Banks are also responding to the competition for the unbanked from the mobile money service providers. Next month, all banks in Ghana will launch a bankwide momo wallet which will be available to customers and non-customers through a mobile App. It is similar to other mobile money Apps from Vodafone, Airtel TiGo and MTN. You will be able to move money from any bank or momo account into this wallet and you can also generate your personal QR Code from this bankwide app. I think this will bring about a healthy competition between the mobile money service providers and the banks which should result in lower charges for money transfers.”
Dr Bawumia
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