The Chief Executive Officer of E-Transact Ghana George Babafemi says financial institutions must, as a matter of priority, introduce relevant innovations to complement the disruptive effect of mobile money else they risk being pushed out of business.
Until recently, cheque as a means of payment was the most popular and preferred but data from the Bank of Ghana shows that it has been surpassed by mobile money – a service that was created by companies originally outside of the financial sector.
With monthly active users of more than 13 million, mobile money’s growth holds threats as well as opportunities for the financial sector, analysts say.
Speaking on the Business Edition on the Citi Breakfast Show, Mr. Babafemi stated that there are enormous opportunities for banks to, among other things, ride on the back of mobile money to reach millions of people other than their customers.
“We are talking about disruptions and victims of disruptions If you don’t innovate and you are still doing your brick and mortar you’ll be out of business like Thomas Cook,” he said making reference to the travel agency which shut down in September 2019 after 178 years in business.
According to Mr. Babafemi, while some banks appear to be catching on with mobile money, he argued that it will be banks’ interest to develop products that can be accessed by everyone and not just the banks’ customers.
He stated that at the onset of mobile banking, banks only sought to create opportunities for their customers while the government had wanted an opportunity to rope in the majority of Ghanaians who were not part of the formal banking sector,
“Banks must not just provide solutions for their customers in the mobile space. They must think beyond those who are not their customers. Ghana has a population of about 28 million and you cannot be providing solutions to your customers of about just 250,000-300,000…the few customers you have may even leave,” he added.
According to the Bank of Ghana’s recent payment systems statistics, there are more than 182,000 active mobile money agents compared to about 1,000 for financial institutions’ branch network. These agents are part of the mobile money ecosystem that generated a value of transactions in excess of G¢66 billion in the first quarter of 2019.
Launch of eTranzact, GhIPSS’ gh-Link cards
eTranzact, in collaboration with the Ghana Interbank Payment and Settlement Systems (GhIPSS) last week launched the Gh-link EMV Prepaid and Debit Card, an electronic payment card that is an upgrade of the Gh-link Card.
The card has multichannel and omnichannel features that enable cardholders to use the most convenient payment channel and the best fit in meeting their need for payment of a good, service, funds transfer or access to cash.
Speaking at the ceremony, Executive Director for eTranzact Ghana Ltd., Mr. George Babafemi, noted that the unveilling the Gh-link EMV Prepaid and Debit Card is their contribution as partners to the country’s cashlite journey.
He said that the Chip and PIN card services being launched are in support of governments’ vision of promoting the use of local cards for local transactions
Mr. Babafemi explained that GhIPSS migrated its Gh-link platform to Europay, Master Card and Visa (EMV) to conform with global payment card standards, adding that: “Funding the Gh-link prepaid card is fun because it can source funding from any mobile wallet, bank account, another cardholder and so on”.
eTranzact, ever since it started operations as far back as 2005-2006, has been at the forefront of providing e-payment solutions to major financial institutions in the country such as mobile banking solutions, ATM switching solutions, Collection and Value-Added Services platforms.