As a non-permanent resident in Ghana, i’ve never felt the need to open a Mobile Money account even though people close to me have advised me to; “You never know when you’d need it” they say. Still, i remained adamant. In my thinking, how can a “developed” country still rely on a system heavily built upon Mobile phone numbers to store money? Yet alone make transfers and pay bills? Feels so 2000 & late.
But on a particular tuesday morning few weeks back, I had to totally fall back to the very cashless system i’d always hated. I had surprisingly misplaced my wallet (which i later found), which contained all my ATM cards. It was a long holiday weekend and i urgently needed to access funds. A good friend of mine who was willing to lend me some uttered “Do you have mobile money” as he wasn’t in Accra at the time. Looking dumbfounded and clueless, i had to resort to using a colleague’s mobile money account to receive money.
Having had a successful and somewhat seamless transaction process, i resorted to digging deeper and seeing for myself, the social effect and importance mobile money has had on the Ghanaian populace over the past few years.
What is this Mobile Money you speak of?
Mobile Money is a digital financial service that lets people store, send and receive money on a basic mobile phone, without requiring a bank account. Services like MTN Mobile Money, Airtel Money, Tigo Cash, and Vodafone Cash, offer Ghanaians a simple alternative to cash transactions.
As at when the service was launched in 2009, about 70% of the population was unbanked, and an equally poor 35% owned a mobile phone. However, the urban-rural divide was a clear market opportunity for low-cost domestic remittance services. At first, Mobile Money operated in a similar way to a traditional money transfer business, but with a twist. Telephone companies operated a network of agents who would help customers process a money transfer via the agent’s own mobile money account.
In 2015, MTN Mobile Money agent stalls alone outnumbered bank branches in the country by a factor of almost 20:1, according to the Bank of Ghana.
Mobile Money Today
In 2015, new e-money regulations set by the Bank of Ghana introduced favourable changes to the way Mobile Money providers were allowed to operate, including simpler registration processes for customers and simplified rules on the business model.
The telephone companies were able to invest in building their services in new regions and adding more offers to customers. Today, Mobile Money is an increasingly popular payment tool for things such as utility bills and school fees, groceries and even online shopping.
Ghana was among the world’s first countries to launch contactless NFC payments via Mobile Money with Airtel’s “tap and pay” service last June.
So far Ghana’s banks have mostly recognised the opportunity in partnering with telephone companies. They gain access to a new customer base and supporting Mobile Money’s role in helping Ghana move towards a cashless economy.
Is Mobile Money truly an old farce or is it Ghana’s financial future?
This is truly the question. With other African countries going the progressive way of Online banking, Mobile app banking, POS, Withdraw/deposit ATMs – this is a very deepening question that the Ghanaian financial authorities need to ask themselves and figure out.
It’s been a remarkable journey for mobile money in Ghana. Nearly one in five Ghanaians are active users of Mobile Money, more than double the total a year ago. In June 2016, the Central Bank released figures showing that Mobile Money transactions in Ghana had grown 20 percent since the end of 2015, reaching 679.17 million Ghanaian Cedi ($177.9 million).
These figures tell the story, a very crucial story. It’s important to note that not every society is required to adapt to progressive financial tools, as development speed varies. It’s up to the Ghanaian banks to create their financial story and run with it.
I truly believe that Ghana has realized that slow and steady wins the race. Now the country is well on the way to a maintained Mobile Money success.