There seems to some way out of the recent spate of robberies apparently fueled by the presence of cash according to Alhassan Andani, CE of Stanbic Bank Ghana who says going cash lite may be a way out of the difficulty.
According to the President of the Ghana Association of Bankers, only some 20-25% of total payments in Ghana are currently done by other means apart from cask.
“Cash is still king and this covers all the physical notes and cheques that are given to individuals and many smaller companies on a daily basis to complete most transactions in the economy.”
He added that cash is always a source of attraction to robbers. “Without a pool of cash, there is no incentive for most criminals. To the extent that the reward is large, people will take risks. Once this is removed and not available for easy pickings, no one plans or schemes on how to attack you to collect what you have thereby reducing the incidence of violence around us.”
We are already on the cashlite route said Andani and possibly the latest bad news is what may shove the country further down that lane.
Indeed there are a large number of products and services that the financial sector has rolled out to enable Ghana go cashlite or the related concept of cashless.
There are currently on the market products such as cards and Point of Sales devices. The cards are either debit and credit cards which can be accessed by all our customers of banks. There is also a full range of mobile money solutions that allow customers of the telcos to collect or paymoney using this channel.
This sector of the economy is a huge mover of money with at least 17 million active mobile money users, a figure that is more than the total banking population in Ghana.
Merchants can collect on so-called soft POSs which allow the merchants to receive money on any internet enabled device. There is also the traditional POS which helps to eliminate cash transactions by using cards.
In the same segment of the market, there are USSDs that have been deployed for very specific services for to some merchants where each merchant is given a unique USSD string code that their customers can dial and use to pay for goods and services using mobile money.
Another entrant to the market is the ability of allowing customer to fund their mobile money or bank account with their mobile money, helping to take out much cash out of the equation.
Adopting a cashlite economy leads to efficiency in the completion rates of transaction because cashless is almost an instant payout. According to the Stanbic CE “We will have a higher volume of completion of transactions which will drive efficiency.
We will also have less litigation over transactions as the chances for losses are minimal. Cash-lite and therefore more digital payment platforms provide a lot more certainty in transfer of value and receipts. There is also ease of reconciliation because the system is almost self reconciling.”
To the finaicial sectors and its customers, “ a cashlite society would largely eliminate the whole industry of managing cash, the cost of which is of no real value add to the sector nor to the custormer, not to talk about the security around protecting this cash against people who are incentified to attack people for physical notes”.
The future future of banking and payments may have arrived. As payments have increasingly become personalised. In the future one may receive a very specific note that says a bill is due in two days time, the message may ask for permission to debit an account and this can be done with the click of a button.
Such a future will be driven by data and insights. You know what to sell to the customer because you know how much they have so if they qualify for a loan or a credit card, you do everything based on data.
The future of digital banking will be omnichannel where customers can start and end the transaction on any device at any place anywhere. They don’t have to go to the branch to get a certain service because they can access all banking services from any device.
It is painful to confront the loses recorded recently but if they become the spark for eliminating an over reliance on physical cash in the Ghanaian economy, those loses would not have been in vain.