President Akufo-Addo has finally given assent to the Payment and Settlement Act after its passage by parliament in March this year.
This is expected to pave the way for a new set of regulations to aid electronic payments in the country and also to stir up innovation in the financial sector space as Ghanaians move closer to the use of digital platforms for transactions.
JoyBusiness is learning the President signed the bill on May 13 this year.
Following this move, Payment and Settlement providers have up to nine months from the assent date to obtain a license from the Bank of Ghana before they can operate.
Commercial banks that also want to venture into mobile money business are also required to seek the Central Banks approval.
Director of Payments at the Bank of Ghana Dr Settor Amediku tells JoyBusiness this would generate more jobs and aid electronic payments in the country.
He said the passage of the Payments and Settlement Act is expected to be a game-changer in the Ghanaian financial system.
Dr Amediku said, “One thing unique in this bill is that we will have financial technology firms, fintech, we have very brilliant Ghanaian students coming out of the universities who have very brilliant ideas on how to develop apps to support the financial sector.”
“They can approach the central bank and they can be guided to ensure that they can also support a particular section of the whole payment system. The same way we have a lot of international institutions and companies are also interested in coming into the Ghanaian payment ecosystem to provide very convenient safe product and services for our people…by the end of 2018, the total money brought into banks as a result of the use of mobile money was GH¢2.6 billion compared to in 2015 it was GH¢547million…”
The purpose of this law is to amend and consolidate laws and guidelines relating to payment systems, electronic money operations and to regulate institutions which issue electronic money and provide payment services.
The country has had the Payment Systems Act, 2003 (Act 662) and the Branchless Banking Guidelines (2008). But these laws and guidelines failed to make provision for emerging payment streams such as electronic money, prepaid cards, credit cards, electronic platforms and payment instruments.
As a result of this lapse, the growth of a lot of Fintech companies and electronic payment products were stifled as there was no proper regulatory system for them to operate.
With the passage of the Payment Systems and Services law, all mobile money operators need to set up a subsidiary and will have to seek approval from the Bank of Ghana.
However, activities of Fintechs and electronic payments are also expected to boom.
The Chief Executive of Ghana Interbank Payment and Settlement System (GhIPSS), Archie Hesse has expressed his delight on the passage of the law.
He said the law will open up the electronic payment space for players to provide greater services to customers.
Ghana going cash-lite
The Bank of Ghana has set 2024 as a deadline for the country to move towards an era where little cash is used in financial transactions.
The move is part of efforts to reduce the cost of doing business and improve revenue collections in the country.
The government has said it would start electronic payments for its services from June this year.
This has been influenced by mobile number interoperability.
A 2016 Bank of Ghana Report revealed that the use of physical cash as the medium of exchange was on a continuous decline due to the increase in the use of other sources of payment, including cards, mobile money and the Ghana Interbank Payment and Settlement Systems (GhIPSS) Instant Pay.