Vice-President Dr. Mahamudu Bawumia has predicted that fortunes of the local economy could be transformed completely if the potential of mobile money is fully exploited and the large informal sector that relies on the service is roped into the formal economy.
The Vice President who was speaking at the launch of the much-awaited mobile money interoperability functional for mobile network operators (MNOs) said: “If we are able to position mobile money appropriately, we can turn the fortunes of the economy around. And this would be good because it will affect the small businesses who are in the majority and which are the ones in dire need of our support”.
According to him, the mobile revolution provides a major opportunity to solve the problem of an unbanked population, because millions of people have mobile phones.
“If financial services can therefore be delivered through the mobile phone, we could cover 70 percent of the bankable population. Today, we have in excess of 37 million connected mobile phones in Ghana, and that means a huge number of people can be brought into the financial space just by using mobile phones. These mobile phones serve as vehicles that can be used to mobilise the millions of cedis held outside the banking sector,” Dr. Bawumia said.
Mobile money interoperability is the ability of customers to send and receive money across various networks. The journey to mobile money interoperability (MMI) commenced last year when a Bank of Ghana a GH¢4.6billion contract awarded to Sibton Switch was cancelled and the deal awarded to the Ghana Interbank Payment and Settlement Systems (GhIPSS).
Although MMI was supposed to have been launched last year November, it suffered a number of setbacks prompting several postponements till yesterday’s launch.
Speaking at yesterday’s event, Chief Executive Officer (CEO) of GhIPSS Archie Hesse said there is no doubt that the introduction of mobile money has revolutionised the country’s financial sector and that of many emerging economies.
He stated that since 2009 when the first mobile money service was introduced to Ghana, the industry has operated as a ‘walled garden’ with customers not able to send money to other networks except by physically going to an agent to cash out and let the agent – who must have the other network, send the money on their behalf.
“It is therefore important that we are collapsing this wall and allowing the various mobile money platforms to communicate seamlessly,” Mr. Hesse said.
The first phase of Mobile Money Interoperability launched yesterday will enable cross-network transactions for mobile money, while the second – expected to be completed in two months’ time – will allow users to link their bank accounts and e-zwich accounts to their MoMo wallets.
“We will complete the linkage between the mobile money platform and e-zwich – and of course bank accounts and mobile money, which then gives us what we term the Financial Inclusion Triangle.
“With the financial inclusion triangle, funds are going to move seamlessly from bank account to mobile money wallet to e-zwich card and vice versa. This one will make us the first on the continent,” Mr. Hesse stated.
He argued that when the bank account to mobile money leg is completed under the financial inclusion triangle, you can move money around regardless of the network – which is a huge difference that will certainly super-revolutionise our financial sector.