Mobile money holds huge potential for Ghana

He said the growth of the service in the country would contribute to economic growth because it offered convenience and consumer protection while lowering the risks inherent in the informal economy and widespread use of cash.

Mr Laryea, speaking in an interview with the GRAPHIC BUSINESS, said mobile money would also act as a catalyst for formalising the economy and enable the government to have a broader view of transactions within the economy.

The patronage of mobile money continues to gain momentum, as for the third year running the value of transactions saw an astronomical jump -- from GH¢2.4billion as at 2013 to about GH¢11.6billion in 2014, according to the Bank of Ghana (BoG).

The number of transactions has almost quadrupled since 2012; from 30 million to about 106.4 million in 2014.

Registered mobile money customers have also increased from 3,303,837 in 2013 to 5,424,650 in 2014, representing a 64- per cent increase, while the total number of subscribers also increased from 20,346,016 in 2013 to 21,721,814 in 2014.

Mobile money not replacing banking

A banking consultant, Nana Otuo Acheampong, also in an a separate interview, said mobile money was filling the gaps in the banking sector but not replacing banking.

“It will be economically suicidal for any bank to open a branch in a community of about 500 people whose major source of income is farming. Mobile money has, therefore, come to provide people in such communities a platform to send and receive money,” he stated.

He believed this was why people living in especially the rural areas had embraced the transfer of money through mobile networks since it was introduced in 2009.

He said mobile money had helped people living in urban areas to transfer funds to friends and families with ease within and outside their communities.

Mr Laryea, commenting on this, said mobile money was complementing banking and not competing with banking.

“Banks will continue to be banks while Telco’s will play their role as telecom companies. Thanks to the rigorous supervision of the regulator and the new Electronic Money Issuers (EMI) and Agent Guidelines, both sectors can play their respective roles and complement each other”, he stated.

The BoG recently issued new user guidelines which give the mobile money outfits of the various telecom companies some autonomy from their banking partners.

Under the new guidelines, the mobile money operators would be required to go for new licences that would make them independent financial institutions rather than just departments of the respective telcos.

The mobile money licences which were issued to banks to partner with the telecom companies will now be issued directly to the mobile money operators, and they will use the banks only as deposit agencies.

The mobile money brands will become separate financial institutions registered under different names but still owned by the respective telecom companies.

Mr Laryea said banks, however, still had a major role to play while the mobile money industry also had its role in the Ghanaian economy.

He believed there was enough room for both to co-exist as banks generally relied on traditional ‘brick & mortar’ infrastructure which creates a struggle to serve low-income customers profitably, particularly in rural areas.

“Mobile money can be seen as a cheaper option of expanding traditional banking to the unbanked using devices that are already in the hands of consumers”, he stated.