Why do we still carry cash in the era of e-money?

A true transaction consists of the following characteristics: the involving parties’ IDs, their relationship, knowledge about each other; the rate, the value, closeness, market type; and capacity to acquire, utilise process and store the gained value.

Having an e-value for cash is no longer a luxury but a necessity in today’s Ghana. The days of carrying fat wallets full of money are gradually becoming a thing of the past. Today, one needs to protect his hard-earned money the best possible way. One secure way in which you can protect your hard-earned cash is to get and use an e-value for your day to day activities.

No one can doubt the fact that handiness is one of the biggest advantages that consumers stand to gain by going cashless. Think about it: you no longer need that bank to be closer to access your money. The ATM is good enough for your needed transactions, just as if you were in a banking hall. Today, just having a phone close enough could save you all the trouble you go through to withdraw money from the bank or ATM.

Payment for goods and services has been done in various forms over the years.  We have moved from barter-trading to paper-money payments for the various items we purchase. With the increasing technology advancement in information and communication, there have been various innovations to help people make payments electronically. Yet, electronic payment introduction came with its challenges. Today with the mobile money interoperability, the big challenge of cross-network transfer of money is over.

Today, transactions have become faster and a lot easier to perform. Experts also conclude that with the advent of e-payments, monetary transactions have become cheaper and easier.

I remember that in my secondary school days I used to see people, especially cocoa farmers, carrying huge sums of money in ‘Ghana must go’ bags and heading for the banks. I have always wondered why they did that, seeing the risk involved in carrying such huge amounts of money around. I doubt if they still do the same these days.

Carrying huge sums of money

If you happen to wake up early in the morning to visit our various lorry stations, you will see our mothers and sisters with large sums of money tied around their waists going to buy bulk foodstuffs from the farming communities.  Have you for a moment thought about the risks that these women have to endure each time they make these journeys? Couldn’t there be a better way for them to make payments for the bulk purchases without physically carrying the money along?  Believe it or not, these women carry with them amounts running into tens of thousands of Ghana cedis.

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The women need a more efficient way of doing business and paying for their goods. The good thing is that technological innovation can be the solution for our market women in order to help securely transfer such huge amounts for trade. One might not appreciate fully how much cheaper it could be for these women to rather opt for an electronic platform for payments – but think about losing a huge sum of money because you didn’t choose an electronic medium.

The efforts at providing an efficient payment platform for the various consumer groups have resulted in the introduction of electronic money. In fact, electronic-money has enhanced the adoption of ecommerce all over the world.

So, why do we still carry cash?

For me it is very necessary to establish the reasons why we carry money, or for which we have to always have some cash on us.

I once met a couple of friends in London on bus #25 from Stratford toward Ilford. They were having a small bragging-chat about the various credit cards each had in his wallet. The point is, in some parts of the world – unlike ours – it is a bragging-right to have various credit cards for your purchases. Here in Ghana, however, we brag more about how much cash we usually carry in our wallets. I think the difference is that in Ghana our points of transaction mostly accept cash. Our ‘chop bars’ only accept cash, our market women only accept cash, our buses only accept cash, etc.

In some countries people selling on the roadside have with them point of sale devices (PoS) for accepting payments from various bank cards. I have actually taken time to study our markets and seen that the various reasons for which people carry money are not disappearing anytime soon. And who says carrying cash is not convenient enough? Promoters of a cashless Ghana can do better by providing reasons for people to desire exchanging their leather wallets for electronic ones.

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What about our big buyers and sellers: are they not sure of settlements after electronic transactions are made, or is it because we cannot really appreciate the convenience message that comes with choosing cashless over cash transactions?

Could our reason for carrying money along while doing transactions be due to the fact that we still aren’t sure if electronic money is accepted widely as a legal tender?  And that merchants think accepting it will be a risk?

Could it be that the Ghanaian is not fully convinced there are clear policies to protect individuals involved in electronic transactions?

Cashless Society?

All over the world, countries are promoting a cashless society. Here in Ghana, too, we have seen various initiatives by many financial institutions to help promote a cashless society. I strongly believe that this agenda of promoting a cashless society here in Ghana is not merely limited to the eradication of cash usage, but to create efficiency in trading relationships between buyers and sellers.

For the financial institutions or various e-payment agencies, convenience messages alone will not cut it for the consumer. In previous articles I have dealt with some of the other cashless payment benefits to the entire Ghanaian market. Although various platforms including e-zwich, mobile money, various debit and credit cards have been introduced, there has not been any significant decrease in the use of cash.

Electronic product adoption, or rather appreciation, still needs more penetration in the Ghanaian market.

Maybe it is because providers are not listening to the feedback coming from the target market, but rather continuously bombarding them with new products.

Electronic payment platforms serve mainly as extensions for the various physical infrastructures needed for monetary activities. These include but are not limited to: ATMs, PoS, online payment platforms, mobile money platforms, etc.

To write-off electronic money at this stage in Ghana would be suicidal, looking at the fact that we are only in the educational phase of this revolutionary way of doing business. As consumers continue to seek cheaper and more convenient ways of making payments for goods and services, electronic money will become increasingly handy. 

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