Economy 60% digitised -- GhIPSS

MORE people and businesses now use electronic platforms to transfer funds and make or receive payments than those who use real cash for the same services, the Ghana Interbank Payment and Settlement Systems (GhIPSS) has said.

GhIPSS said the country was making steady progress towards becoming a cashlite society, as about 60 per cent of all financial transactions were initiated and completed on the various electronic platforms in use.

With landmark initiatives such as the mobile money interoperability now in place and the universal QR code system due to take off later this year, the Chief Executive Officer (CEO) of GhIPSS, Mr Archie Hesse, told the Graphic Business on July 15 that the country was on a firmer footing towards achieving a totally cashlite status in the next three to five years.

Taking his turn on Banking & More, the specialised that shines more light on the banking sector through insightful interviews and discussions online, Mr Hesse said the economy would have been considered fully cashlite when between 80 per cent to 90 per cent of all transactions took place on electronic platforms.

He explained that the raging coronavirus disease (COVID-19) pandemic was also a blessing in disguise in the country's drive towards a cashlite economy.

He said data showed that since the outbreak of the disease in the country, the usage of digital platforms had shot up as more people avoided cash for fear that currencies could transmit the disease.

"So if it would have taken us five years, I think because of this dispensation, it might take us between two-and-half to three years," he said.

Grass to grace

Mr Hesse said  in the 13 years that GhIPSS had been in operation, Ghana had moved from "nowhere to being one of the best in the world in terms of payments and electronic systems”.

Consequently, he said, "On the journey to a cashlite economy where let's say 80 per cent to 90 per cent of our transactions are done electronically, I will say we are 60 per cent there.

"With data from the Bank of Ghana (BoG) showing that a total of GHS16.3 billion of currency was in circulation as of December last year, it means that about GHS9.78 billion was circulating through electronic forms in that year.”

Digital journey A national switch

GhIPSS was established in May 2007 to develop and maintain digital payment infrastructure for banks and non-bank financial institutions (NBFIs) and telecommunications and financial technology companies (Fintechs) to connect to and use to make electronic transactions across board.

Since then, the firm has rolled out a number of projects, key among them being the e-Zwich card, the Cheque Codeline Clearing (CCC) system, the Ghana Automated Clearing House (GACH) system, the National Switching and Processing system (gh-link), the Mobile Money Interoperability (MMI) and the Ghana universal QR code.

The GhIPSS CEO said the country's focused, speedy and enviable journey from a cash-based economy to a cashlite one was due to the strategic deployment of these superior infrastructure over the years.

Those innovations, he said, had helped rope more people into the banking space while encouraging the use of electronic transactions nationwide.

Inclusion triangle

The GhIPSS CEO said through the efforts of the company and with the support of the government, BoG and the banks and other stakeholders, Ghana had also achieved the financial inclusion triangle, which made it possible for people to move their funds from one form to another without cashing them.

He mentioned the e-Zwich card, the GhIPSS Instant Pay, the MMI and the soon-to-be deployed Ghana universal QR code as the various initiatives that made it possible for the country to achieve that feat.

"It means that it does not matter which form your money is in the country; you can pay anybody or move it anywhere and this is unique to our country," he said.

Slow adoption

Mr Hesse said while the country had chalked up a pass mark in the deployment of electronic transaction infrastructure, the same could not be said when it came to the adoption and usage of such platforms.

He blamed the slowness in the adoption of digital platforms on the slow deployment of the company's infrastructure by the service providers and the general culture of people.

He, however, admitted that the cost of electronic products and services was a key factor in the adoption of such platforms, but added that as more people utilised the platforms, the cost would naturally reduce.

Impact of COVID-19

On the pandemic, Mr Hesse said it had spurred the usage of electronic financial services.

He, however, noted that while the viral spread had forced more people to utilise electronic platforms, especially mobile money services, it had also slowed down commerce in general, resulting in lower transactions.

He added that the company was also in discussions with banks and other stakeholders to develop a fraud detection platform to help check the rising incidence of infiltration of digital financial platforms.