Adoption of electronic payments by MSMEs key to moving Ghana cash-lite


 “Now I have multiple streams of collection for my business and do not have to bear the burden of carrying bulk cash with all its insecurities. Financial transactions for my business are conducted seamlessly using my mobile device anywhere I am.” – Auntie Maggie, Owner of Multiple Stores at Makola Market

Ghana’s economy, as reported in the PwC’s Global Economy Watch for 2018, is expected to grow even faster than that of China, which has been predicted would grow by 6-7%. The World Bank estimates that Micro, Small and Medium Enterprises (MSMEs) contribute significantly (circa 70%) of this growth in the form of employment and business productivity. One key factor to the success of these projections is the development of an effective system on how purchases of goods and services are paid for and how payments for sales are received.

The MSME can be categorized into these:

  • Service sector
  • Commerce sector-import /export
  • Manufacturing
  • Value chain focused
  • Support services –local content policy businesses


Digital life

Consumers in our local market places prefer cash as a means of payment for goods and services. As a result, sellers sometimes would have to count large sums of monies in situations where the transaction is of high value and then balancing to confirm for accuracy and completeness, which could be very cumbersome. Now the ability to manage these cash transactions in an innovative way, both instantly and efficiently, is critical to business growth.

Ghana is a cash-reliant economy with over 99% of payments being cash based. To this extent, there are several activities and policy statements being drafted to turn the country into a cash-lite economy. Financial players, therefore, need to take the front row seat to steer the conversation towards consumers and businesses and the benefits of going digital or having a strategy in this digital world.

Today, technology is unearthing new channels and inventions of making payments electronically. But while digital is undoubtedly on the rise, a cash payment is still prevalent. The responsibility is on organizations to push for enhanced payment systems to make business transactions seamless.

The emphasis is on payments, but it is critical we involve the MSMEs in these conversations since payments and collections are an essential component of their business. The consumer as the purchaser is improving the use of international cards and wallets as alternative sources of payments. The collector or the seller, on the other hand, should be ready and trusting to accept these emerging payments that will solve the problem. It is the most apparent encapsulation of how a cash-lite economy should look like or rely on.


It has therefore become important for businesses to also be in the position to accept these payments; hence emerging payments come with emerging collection tools to holistically deal with the cycle of buying and selling. The MSMEs in the same vein need to rely on these emerging payments for settling and running of their businesses.

The digital payments landscape is characterized by the following:

  • Mobile Payments – with mobile phones being the most common, simplest and preferred digital tool used by all consumers across all ages, it has become an asset for the telcos and other institutions in facilitating collection and payments tools. According to a 2017 BoG report, mobile money deposits hit GHS 2.3 billion representing a growth of 84.6% over the previous year. This means that for an MSME to increase its reach and enhance its business, it must position itself to receive payments via mobile money.
  • E-commerce – consumers’ comfort in using their self-owned gadgets in assessing products and making payments indicates the readiness of the public in leveraging on the convenience e-commerce offers without the uneasiness of carrying cash to transact their business. Emerging markets research firm, Jana, recently released insights on the e-commerce preferences of African consumers within South Africa, Nigeria and Kenya in the lead on the continent. Ghana still has a lot to do in this direction.
  • POS/MPOS – probably one of the first electronic payment/collection tools that has thrived on a small but lucrative niche card base in the country. The influx of international cards has also contributed to the survival of the POS device as a means of receiving payments. This is also the most expensive option for a business that doesn’t move volumes due to the interchange and other cost of running the device. Advancements in mobile telephony is also now challenging the traditional POS device with a number smartphone now being positioned to perform similar functions as the POS. This is enabling businesses to have seamless collection / payments and helps to remove the cost bottleneck that most MSMEs face.
  • QR codes – QR codes are emerging quite strongly for in-store or face-to-face payments. It’s offline and static nature enables all types of mobile devices (including tablets) to transact within seconds. The MSME just needs to display a code on their shop front and their account is credited each time a payment is made.
  • Wallet to Wallet – This is a means of accepting payments between wallets with the incessant growth of mobile money deposits. An MSME capable of receiving as a merchant is in the right direction to increase business.
  • Wallet to account – With financial institutions like Stanbic Bank making it easy for small businesses to take advantage of digital collections and still directly credit mainstream bank accounts just with a two-step process on your mobile phones means no matter the collection method, banking needs will be met.

These collection mechanisms, with emphasis on their collection attributes, will benefit not only the digitally savvy but also the not so digitally inclined as it can be defined and used on mobile phones, MPOS or POS or QR code. You just need a phone and it can be turned into a multipurpose collection hub to the banks and wallets.


A major benefit and reason why MSMEs should take advantage of digital payments and revitalize their businesses is the inherent security they come with. Payment is made directly into a bank account or wallet. No cash handling risk.

It is also cheaper for a sector with minimal margins to use better improved simple, secure and faster tools and means to collect payments or make payments.

One other benefit that can be considered as intangible is the role digital payments play in ensuring the implementation of good governance principles which ensures sustainability of the MSMEs. A sole cash reliant business will find it difficult to distinguish the business from the owner and also foster trust in the business environment.

Again, it breeds confidence which encourages investors (angel investors, equity partners or banks) to pay attention and assist business growth as the possibility of diversions is reduced and ring-fencing is reinforced.

Seamless collection processes create client loyalty as customers are happy to have options when shopping and the simplicity of using their mobile phones or cards to make payments.

Finally, access to market is noted to be one of the key challenges of every MSME and changing collection and payment method from cash is one step closer to the local, sub region and international markets.

One will be tempted to allude to cost as a depriving factor but as indicated in one of the benefits, this rather saves money as the security it fosters might not just be quantifiable but sustains the business.

As financial institutions, the benefits of using client’s transaction pattern, data and information to make bespoke collection tools for the benefit of MSMEs is a focus and our digital payments drive is geared towards just that. This is a field that has enormous benefits to the MSME and one would say it is more aligned to the demographics and dynamics of MSMEs.


The case is evidently strong for the use of the mobile device closer to being at least 98% cashless and MSMEs will reap the benefit of running the businesses seamlessly and save cost and time.

The writer is the Head Enterprise Banking, Stanbic Bank

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