The Bank of Ghana (BoG) as part of efforts to enhance the payment and financial systems in the country to foster efficient payments, improve financial inclusion, and enhance financial innovations, has out-doored a strategic plan that spans 2019-2024.
The strategic plan, termed ‘National Payment Systems Strategic Plan (2019-2024)’, sets forth the policy direction and guidelines that will promote an enabling environment to develop the Ghanaian payment and financial systems.
The plan, according to BoG, leverages on opportunities provided by digital technologies to promote competition, efficiency, innovation and financial inclusion within the payment ecosystem. The plan is anchored on the provisions of the Bank of Ghana Act, 2002 (Act 612), as amended, and the Payment Systems and Services Act, 2019.
“The new plan builds on the 2014 Strategic Roadmap by providing a policy framework to stimulate the electronic means of payment in Ghana and encourage shared responsibility in the implementation of the Plan. Efficient, safe and convenient payment systems are fundamental to economic activity and wealth distribution”.BoG
Ghana’s payment system development, since 2000, has been guided by strategic plans to address the dominance of the informal sector and cash payments. BoG stressed on the essence of a well-formalized payment system in the development of the economy.
“Formalizing payments is fundamental to modernizing Ghana’s economy and holds prospects for better outcome for fiscal operations of government and efficient functioning of the economy”.BoG
The 2014 Strategic Roadmap
The previous 2014 Strategic Roadmap sought, among other things, to increase the use of secured and efficient electronic payment channels to move the country to a cash-lite economy. It also sought to identify measures needed to create an enabling environment that facilitated the provision and use of innovative electronic payment methods as well as to promote financial inclusion.
The BoG underscored that it was able to achieve a number of results under the 2014 Strategic Roadmap. Key among the success stories of the plan was the establishment of a Payment Systems Advisory Committee which advises the Bank on payment system issues.
It was also under this plan that the Implementation of GhIPSS Instant Pay (GIP), which allows payments to be sent across financial institutions electronically from one bank account to another, started. Introduction of Gh-Link card which interconnects financial institutions and systems of third party providers, and Migration of payment cards to EMV1 chip and PIN standards were all achievements under the 2014 Strategic Roadmap.
Rationale for a New Payment Systems Strategy
BoG underscored that payment systems are undergoing significant changes driven by technological advancement and evolution of customer needs. Electronic payment is gradually edging out paper-based payment instruments on account of its relative efficiency.
Consumers demand for convenience, speed and accessibility in payments are encouraging deployment of digital payment products. In Ghana, the BoG noted that mobile phone penetration has enhanced the appeal of mobile money for payment services, and holds prospects for overcoming constraints to financial inclusion. However, BoG disclosed that it has recognized that it requires substantial efforts for payment habits to change from paper-based to electronic form.
“It is important that the efforts of Payment Service Providers to meet the complex payment needs of various users are properly coordinated and guided to constrain potential risks and enhance societal value.
“A concerted effort of all stakeholders is required to ensure that innovative payment products and services pose no risk to the integrity of the payment system and financial stability. A regulatory framework that provides space for FinTechs and other non-bank entities in the payments space is therefore essential”.BoG
This strategic plan, during the five years, will give direction to the rapidly evolving payment ecosystem, the Bank of Ghana assured. The BoG is the major stakeholder in the implementation of the plan. However, the plan has outlined certain roles that must be performed by the NCA, GhIPSS, the Ghana Chamber of Telecommunications as well as the Ministry of Finance.
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