…real-time payment services post strongest performance
The Ghana Interbank Payment and Settlement Systems (GhIPSS), the central bank’s subsidiary tasked with promoting a cash-lite economy, experienced a significant upshot in its operation for 2020 due to the strong performance shown by its real time payments services.
According to data from GhIPSS, real-time payment services – which comprise Mobile Money Interoperability (MMI), GhIPSS Instant Pay (GIP), GhQR, Proxy Pay, GhIPSS Corporate Suite, GIP Payment Gateway and Request to Pay – pushed up volumes and values of transaction on its platforms significantly.
At the end of 2020, a total of 77 million transactions were processed across all platforms compared to the 38 million transactions processed in 2019, representing a 103 percent increase. The value of transactions processed in 2020 was GH¢254billion, a 16 percent increase compared to the GH¢219billion processed in 2019.
Real-time payments services contribution
The major contributor to this performance was MMI – processing a total of 43.9 million transactions, representing a 367 percent increase from 9 million transactions processed in 2019. The MMI performance was driven by three use-cases: namely transfers between wallets across Mobile Money Operators (MMOs); transfers from mobile wallets to bank accounts; and transfers from mobile wallets to e-zwich card wallets.
The GIP platform also recorded significant growth in both transfers from bank accounts to mobile wallets and transfers between bank accounts across banks. At the end of 2020, GIP transactions increased by 257 percent from 1.9 million in 2019 to 6.8 million. GhIPSS also recorded introductory transactions from new services such as Proxy Pay and GhQR code.
“The upsurge in use of these real-time services was largely influenced by COVID-19-related factors: such as the three-week lockdown that restricted the physical movements of people; public awareness through extensive education discouraging handling physical cash and encouraging the use of electronic alternatives; and the incentivisation from the financial services industry with fee waivers on their services,” Chief Executive Officer of GhIPSS, Archie Hesse, said at a media encounter.
Clearing/Bulk Payments Services
Per the data, the clearing house was impacted by the three-week partial lockdown as corporates, which are the primary users of cheques and ACH, were unable to operate. Additionally, industries such as manufacturing, hospitality, travel and education have not been able to return to normal operations, resulting in reduced economic activity.
In spite of these challenges, the clearing house processed the second-highest volume of instruments and managed to record a 0.10 percent increase to bring the total volume of Cheques processed in 2020 to 14.9 million transactions. The clearing house still remains the preferred channel for processing high values, especially by large corporate institutions.
Despite the state of the economy in 2020, the clearing house recorded a 9 percent increase in transaction value from GH¢209 billion in 2019 to GH¢229 billion.
In a bid to extend real-time payment functionalities to bulk payments which is mainly patronized by corporate clients, GhIPSS introduced the Near Real-Time (NRT) service. Since its launch in September, 2020, GhIPSS has successfully processed over 100,000 NRT payments. It expects to see adoption of NRT growing among corporate clients in the near future.
Cards Payments Services
E-zwich transactions declined by 3 percent from 10.7 million transactions in 2019 to 10.4 million in 2020. Gh-link transactions also declined by 17 percent from 900,000 transactions in 2019 to 800,000 transactions in 2020. Despite the decline in transaction volumes, the value of transactions increased. The value of e-zwich transactions increased by 43 percent from GH¢6 billion in 2019 to GH¢9 billion in 2020.
The value of Gh-link transactions also increased marginally by 0.14 percent to GH¢300,000. “Lack of adequate outlets to access e-zwich services remain the major hindrance to the growth of e-zwich transactions. Clients are compelled to move out all their funds once they are paid to reduce the frequency of using the e-zwich card.
The decline in Gh-link transactions on the other hand can be attributed to the lack of Gh-link card issuances on the part of financial institutions, the growing adoption of mobile forms of payments and the impact of COVID-19 communications on dangers in touching surfaces,” Mr. Hesse said.
On outlook for this year, Mr. Hesse noted that Ghana is seeing a growing adoption of non-cash payments among individuals. “In order to consolidate the gains made in 2020, GhIPSS will continue to pursue the cashlite Ghana Agenda by deepening usage of existing digital payments platforms while exploring other opportunities.
To achieve this goal the company will: partner financial service providers to roll out all new real time services to their customers, deepen usage through public education and ensure continuous system availability and reliability.”
He noted that, GhIPSS would also be working with partner institutions to extend the use of the ACH NRT, Proxy Pay, GIP Payment Gateway and the GhIPSS Corporate Suite to corporate institutions. These services will provide corporate institutions with efficient payment options. COVID-19 has brought with it accelerated adoption of digital payments as witnessed in the surge in e-payments volumes.
It is expected that these digital payment experiences will continue to grow in popularity post COVID-19 pandemic.