CASES IN FINANCE – EPISODE 10: Understanding Mobile Money: “The Trust Account Conversation”

By  Enock Yeboah-Mensah

 “Our prosperity as a nation depends upon the personal financial prosperity of each of us as individuals.” — George S. Clason

The quote lingered in Michael’s mind as he crossed the faculty lawns that week. The “MoMo Lesson” became the talk of campus. Michael could hardly walk across the faculty lawns without someone stopping him for an explanation. “So wait, our MoMo money isn’t really with MTN?” one student asked during lunch. “Then where is it?” The curiosity was contagious. By Thursday afternoon, a small group of classmates gathered around the shaded benches behind the Business School café; Yaw, Priscilla, Dennis and Ama, each with a burning question and a phone full of MoMo messages.

Michael smiled. “You all sound like you’re about to audit an electronic money issuer.”

Priscilla laughed. “Maybe we should. My MoMo balance is my emergency savings, and now you’re saying it’s just a ‘digital reflection’? Explain that trust account thing again, but this time, like we’re not in Mr. Boateng’s exam.”

The Trust Account: Where the Real Money Sleeps

Michael leaned forward. “Okay. Think of it this way. When you load cash into your MoMo wallet, you’re not sending your money to MTN itself. The cash you deposit doesn’t stay with the telecom company, it’s lodged in what’s called a Trust Account, held safely at partner banks.”

“So it’s like a pool?” Ama asked. “Exactly,” Michael nodded. “Let’s say ten million people each deposit GHS10 into their wallets. That’s GHS100 million total. MTN, or whichever electronic money issuer, must deposit that same GHS100 million into a trust account in a commercial bank, say GCB Bank, Ecobank, or Standard Chartered. This account is managed by an independent trustee, not the telecom company, and it’s there to back every electronic cedi, one for one. So if the whole country decided to withdraw their MoMo balances at once, the banks would have the physical cash to pay out every pesewa.”

Yaw whistled softly. “So that’s the real money, the e-money we see is just a mirror image.” Michael nodded. “Yes. The e-money is digital, but the trust account holds the physical cash. As of September 2025, those trust accounts held almost GHS30 billion across all partner banks. That’s thirty billion cedis of real deposits sitting in the banking system because of mobile money.”

How Interbank Settlement Keeps the System Honest

Dennis frowned. “But how does it move when I send money to someone on a different network?” Michael smiled, happy to explain. “When you send GHS100 from MTN to someone on Telecel, the system routes that through the Ghana Interbank Payment and Settlement Systems (GhIPSS). Behind the scenes, MTN’s trust account at, say, GCB Bank transfers GHS100 to Vodafone’s trust account at, say, Ecobank. It’s done through the Mobile Money Interoperability (MMI) switch and settled later in the day through the Bank of Ghana’s RTGS system. So, while we see instant transfers on our phones, the real money moves between banks in the background.”

Priscilla’s eyes widened. “So it’s like bank-to-bank transfers, but faster and automated?” “Precisely,” Michael said. “It’s a digital handshake between the telecoms and the banks, ensuring every MoMo transfer has a real counterpart in the banking system.”

When Trust Account Balances Rise and Fall

Ama tilted her head. “Then why does the amount in the trust account change over time?” Michael drew a small graph in his notebook. “The total balance goes up when more people deposit money into MoMo wallets (Cash in) or when government and companies pay through MoMo like scholarships or salaries. It falls when people withdraw, wallect to banks, or use their wallets for payments (Cash out). In short, when mobile money usage increases, trust account balances increase; when usage drops, the balances fall.” Yaw nodded slowly. “So the trust accounts are like the pulse of Ghana’s cashless economy.” “Perfectly,” Michael replied. “They measure how much of Ghana’s liquidity is flowing through digital rails.”

The Unfair Interest Rate Mystery

Priscilla scrolled through her phone. “Wait, Michael, you said banks pay about 4% on those trust accounts. But corporate call accounts earn 7% or even more. Why is the rate lower when the money is larger?” Michael leaned back, a faint smile on his face. “That,” he said, “is the million-dollar question.”

He continued, “That 4% was introduced by the Bank of Ghana in consultation with the telecoms and banks years ago when mobile money was at its experimental stage; small balances, uncertain risks and untested systems. But times have changed. As of September 2025, the trust accounts now hold over GHS30 billion across partner banks; larger and more stable than many institutional or corporate accounts. Yet the rate hasn’t been reviewed. Meanwhile, banks use those same deposits as cheap liquidity, lending them out at interest rates exceeding 25% whiles the trust accounts still earn about 4%.”

Ama frowned. “So we’re basically funding the banks’ profits.” “Pretty much,” Michael said. “In finance, large and stable deposits should earn higher rates, not lower ones. The trust accounts are among the most predictable pools of funds in the market, perfect for liquidity and lending management. It’s like the Law of Large Numbers: when millions of small deposits are pooled together, the overall risk drops, making the funds safer and more valuable to banks.”

Yaw nodded. “Then why hasn’t anyone challenged it?”

Michael’s tone shifted. “Actually, the Bank of Ghana already anticipated this issue. Under the Guidelines for Electronic Money Issuers, banks are required to pay fair, market-based interest rates on trust accounts not arbitrary ones. Even more importantly, at least 80% of the interest earned must be passed through to the mobile money customers, after legitimate administrative deductions. Any attempt to disguise charges or manipulate rates to reduce customer returns is considered a violation of these rules, attracting strict sanctions for both the bank and the mobile money operator.”

Priscilla looked up, puzzled. “So by law, most of that interest should come back to us?” “Absolutely,” Michael replied. “The intent of the policy is to make sure the people whose money fuels the system actually benefit from it. Otherwise, the whole structure becomes regressive transferring value from millions of low-income users to a few large financial institutions.”

He paused, letting the thought sink in. “It’s not just a question of fairness, it’s about policy alignment. If the goal of mobile money is to promote financial inclusion, then the returns generated by these billions of cedis shouldn’t bypass the very people who made it possible.”

The Case for a Fairer Return

The group fell silent, absorbing the weight of what Michael had just revealed.

“So the banks make money, the operators charge us 1% on every transfer, and yet users rarely see the 80% interest we’re legally entitled to?” Dennis asked, breaking the uneasy quiet. “That’s the concern,” Michael replied. “In theory, users should receive most of the interest earned from their pooled funds. But in practice, transparency is weak. Some operators distribute small bonuses occasionally, yet few disclose how much interest was actually earned or how much was passed on. The structure creates opacity where transparency should be the rule.”

Priscilla frowned. “So, if the banks are making millions from our pooled deposits, and the trustees aren’t negotiating better rates, who’s protecting the customer?” “That’s the heart of the matter,” Michael said quietly. “Those trust funds don’t belong to MTN or Telecel, they belong to the users. A fair, market-based interest rate on the trust accounts would allow more value to be passed down to customers or reinvested through lower transaction fees. It would make the system fairer whiles still keeping it profitable for everyone.”

Ama leaned forward. “So this isn’t just about fairness, it’s about compliance, isn’t it?” “Strictly,” Michael nodded. “The Bank of Ghana’s guidelines exist to protect inclusion. They require that at least 80% of the interest earned on the trust accounts after legitimate administrative fees is passed through to users. At the current 4% rate, the total annual interest on GHS30 billion is roughly GHS1.2 billion. By law, GHS960 million of that should flow back to the people whose deposits make mobile money possible. If distributed quarterly, that could transform MoMo from a simple payment platform into a mass savings instrument.”

Dennis smiled wryly. “So people could actually grow their money on MoMo, not just move it around.” “Correct,” Michael said, returning the smile. “That’s financial inclusion at its next stage, moving from access to value. The same way the first MoMo beep brought millions into the financial system, fairer interest sharing could keep them there, helping build savings habits and financial discipline.”

Finance Lens

At its core, the “trust account debate” sits at the intersection of monetary policy, financial intermediation and inclusive finance. Ghana’s mobile money ecosystem, now holding over GHS30 billion in trust accounts, is no longer a peripheral player in the banking system, it is a major source of liquidity and a quiet force shaping monetary transmission.

From a finance perspective, these trust accounts function like institutional deposits: large, stable and predictable. They reduce liquidity risk for banks and lower their marginal cost of funds, yet paradoxically attract interest rates (around 4%) far below what similar deposits such as corporate call accounts command in the open market (7%–12%). This pricing anomaly distorts incentives and undercuts the principle of value sharing in inclusive finance.

Under the Guidelines for Electronic Money Issuers (EMI Guidelines), banks are required to pay market-reflective interest rates on trust accounts, and at least 80% of the interest income must flow back to customers. In theory, this framework embeds financial justice into the system: the small saver whose GHS10 deposit contributes to a GHS30 billion pool should receive a share of the value created by their collective liquidity. In practice, however, weak transparency, limited negotiation leverage by trustees and passive regulatory enforcement have allowed a structural imbalance to persist.

Economically, the opportunity cost of underpricing these deposits is substantial. At a fair 8% rate, annual interest on GHS30 billion would be GHS2.4 billion, twice the current estimate at 4%. Applying the 80% pass-through rule would translate to GHS1.9 billion in potential returns to mobile money users, money that could stimulate savings, boost household liquidity, and deepen financial inclusion. The unearned differential effectively represents a transfer of value from low-income digital users to banks’ balance sheets, reinforcing a regressive flow of financial benefits.

From a policy standpoint, aligning trust account returns with market realities is not merely a question of fairness, it is a macroeconomic necessity. A market-based rate would:

1. Enhance transparency in digital finance value chains;
2. Encourage competition among banks for mobile money trust deposits;
3. Support inclusion-driven savings mobilization, especially for low-income groups; and
4. Improve monetary policy transmission, as these large, low-volatility balances influence system-wide liquidity and interbank dynamics.

In essence, the finance lens reframes mobile money not just as a payments innovation but as a liquidity engine that deserves proportional reward. Ghana’s next inclusion frontier lies not in expanding access alone, but in ensuring that the financial value generated by digital liquidity circulates back to its rightful owners; the users themselves. When inclusion meets finance, justice is no longer a slogan; it becomes a yield.

Moment of clarity

The group sat back, their thoughts mixing with the soft hum of the evening. The café had grown quieter now, the faint buzz of MoMo notifications punctuating the air, each tone a heartbeat of Ghana’s digital economy, pulsing with both promise and imbalance.

Priscilla looked up thoughtfully. “That’s real inclusion, where digital finance doesn’t just reach people but rewards them.” Michael nodded slowly. “Exactly. Access is the first step; equitable participation is the next. Ghana’s mobile money story has been one of innovation and reach. Now it must evolve into one of fairness and shared value.” He paused, then leaned forward with a more analytical tone. “Let’s be practical. Given the size and stability of these trust accounts, over GHS30 billion, they behave more like institutional or long-term corporate deposits. In any well-functioning market, that kind of liquidity would earn between 7% and 12%, not 4%. That’s the fair, economically justifiable range.”

Yaw nodded, interested. “So raising the rate wouldn’t hurt the banks?” “Not at all,” Michael said. “It wouldn’t distort the market, it would correct it. Right now, banks enjoy cheap liquidity from these deposits and lend them out at over 25%. A revised rate would simply reflect their true value and ensure users share in the wealth their deposits create. It’s about restoring balance, not punishing anyone.”

Priscilla smiled faintly. “So, the trust accounts deserve the same respect and returns as any major institutional client.” Michael grinned. “Absolutely. That’s how inclusion becomes sustainable, not by charity or slogans, but by pricing fairness and policy accountability.” The sun dipped lower, painting long shadows across the café. Their phones buzzed again with new MoMo alerts, each one a quiet reminder of Ghana’s evolving digital economy, still learning to turn access into equity.

 

Discussion Questions

1. How does the current interest rate structure on mobile money trust accounts reflect (or contradict) Ghana’s broader goal of financial inclusion? Should inclusion policies focus only on access, or also on equitable value sharing?
2. The Bank of Ghana’s EMI Guidelines require that at least 80% of interest earned on trust accounts be distributed to users. What mechanisms or policy interventions could strengthen compliance and transparency among banks and mobile money operators?
3. With over GHS30 billion held in mobile money trust accounts, how might these funds influence Ghana’s monetary policy transmission, interbank liquidity, and credit supply? Should the Bank of Ghana treat these balances as a distinct component of the financial system?
4. Given that corporate call accounts often earn 7–12% whiles mobile money trust accounts earn about 4%, what market or structural factors might explain this disparity? How can regulators and trustees ensure that pricing of these deposits becomes market-reflective without destabilizing banks?
5. If users’ pooled deposits generate billions in interest annually, is it ethically justifiable for telecoms or banks to retain a large portion of these returns? What governance frameworks could ensure that the benefits of digital liquidity are more equitably distributed among users?

Previous Case (Episode 9) Discussion Questions Solutions

1. In what ways has mobile money redefined the structure of Ghana’s financial system, and does its growing dominance pose a competitive threat or a complement to traditional banks?

Mobile money has expanded financial access beyond the reach of traditional banks, turning mobile phones into functional bank accounts. It has created a parallel payments infrastructure that complements banks by increasing transaction velocity, deposit mobilization and digital inclusion. However, its dominance can also pose a competitive threat, as customers increasingly rely on telecom-based wallets instead of bank accounts for day-to-day transactions. The ideal relationship, therefore, is symbiotic, banks serve as custodians of trust accounts and providers of credit products whiles mobile operators handle last-mile access and transaction distribution.

2. The article describes e-money as “a digital promise backed by cash sleeping in a bank.” What does this reveal about the nature of money, liquidity and trust in a digital economy?

Describing e-money as “a digital promise” highlights the trust-based foundation of modern finance. In essence, e-money is not physical currency but a claim on cash held by a bank. This reveals that money, whether digital or physical, functions primarily as a social contract, its value depends on public confidence in the institutions backing it. Liquidity in the digital age is therefore data-driven, maintained by real-time systems and regulatory oversight rather than vault cash. Trust shifts from physical possession to technological reliability and institutional assurance.

3. How do the core systems—Wallet Management, Transaction Processing, Agent Management, Fraud & AML Engine and Integration Middleware—mirror or differ from the functions of traditional banking infrastructure?

The Wallet Management System (WMS) mirrors a bank’s core ledger system, recording every user’s balance and enforcing KYC rules. The Transaction Processing System (TPS) resembles payment switches like GhIPSS, executing real-time settlements. The Agent Management System parallels branch networks, ensuring liquidity and cash management. The Fraud & AML Engine reflects banks’ risk management and compliance units whiles the Integration Middleware plays the role of interbank connectivity and API infrastructure, linking systems across institutions. The difference lies in scale and accessibility, mobile money systems are built for high-volume, low-value transactions executed instantly.

4. Mobile money agents are described as “Ghana’s real bank branches.” Discuss the implications of this statement for financial inclusion, employment, and monetary control.

Mobile money agents serve as the human interface of Ghana’s digital economy, enabling deposits, withdrawals and transfers in areas underserved by banks. This has significantly advanced financial inclusion, providing over 400,000+ access points compared to the limited physical branches of banks. Agents also create employment opportunities, fostering micro-entrepreneurship nationwide. However, their influence raises concerns about monetary control, as large cash holdings outside the formal banking sector can affect money supply management and complicate policy transmission. Regulators must therefore ensure proper float management and liquidity oversight.

5. Considering the regulatory oversight by the Bank of Ghana, how can policymakers balance innovation, risk management and consumer protection as mobile money becomes more central to financial intermediation?

The Bank of Ghana faces the dual challenge of encouraging innovation whiles safeguarding financial stability. To strike this balance, policymakers must enforce strict interoperability standards, risk-based supervision, and transparent trust account management whiles allowing room for fintech creativity. Strengthening cybersecurity frameworks, consumer education and real-time compliance monitoring will sustain confidence in the system. Ultimately, regulation should evolve toward a tiered model, where innovation is not stifled, but systemic risks, from fraud to liquidity mismatches—are contained through continuous oversight and data-driven governance.

The author is a Strategy, Leadership & Finance Enthusiast, an Mphil Finance graduate of the University of Ghana Business School, a member of the Institute of Chartered Accountants, Ghana, and a part-time lecturer at the UGBS.

Email: [email protected]