A partnership agreement formalised between the Ghana Interbank Payment and Settlement Systems (GhIPSS) and global electronic payment service Visa is set to boost the domestic payment ecosystem, especially among financial institutions.
The historic partnership, which was officially announced at the GhIPSS headquarters in Accra and is scheduled to begin in May 2024, will take advantage of knowledge about the area and the global reach of both parties. It is expected to transform domestic payments through increased effectiveness, lower costs, and a more seamless dispute resolution procedure.
According to the Chief Executive Officer of GhIPSS, Archie Hesse, “This partnership signifies a pivotal moment for Ghana’s payments ecosystem. By joining forces with VISA, we unlock a gateway for improved efficiency, lower transaction costs and seamless dispute settlement. Additionally, this collaboration opens doors for future collaborations, paving the way for further advancements in the Ghanaian financial landscape.”
In light of the development, a significant advantage is that this will ensure a reduction in the overdependence on foreign currencies since GhIPSS is locally owned, hence all transactions will be made in the Cedi as well as hassle-free currency exchange.
While local payments are made in cedis, banks usually use foreign currencies to pay service providers. For financial institutions, however, the GhIPSS-VISA cooperation will further reduce costs and complexity by allowing everything to be denominated in cedis.
This results in substantial cost savings for VISA agents, especially for banks, and eventually lower transaction fees for clients. Moreover, GhIPSS functions under a strict mandate for the public interest, guaranteeing that transaction fees remain affordable for clients and companies.
Mr. Hesse stressed that his outfit is committed to ensuring that transaction costs remain low.
“As part of this commitment, GhIPSS integrates a public good element into all our operations. If we identify excessively high transaction costs, the central bank has authority to mandate that GhIPSS reduce them to an appropriate level. Our cost per transaction remains one of the lowest among our peers, and despite recent economic fluctuations we’ve maintained this level for the past three years,” the GhIPSS boss further stated.
Let’s go electronic and reduce exposure to robbers – GhIPSS
This occurs at a time when inefficiencies, particularly those involving numerous offshore counterparties, are still prevalent in payment and settlement transactions across the continent.
Mr. Hesse also alluded to the potential for “dual cards,” which may link to both Visa’s infrastructure and nearby establishments that aren’t usually on its network. He claimed this will help increase financial inclusion together with a GhIPSS Academy.
The Vice President and Head of West Africa Cluster at Visa, Andrew Uaboi, remarked that the development is a testament to Ghana’s importance as a market within the region.
“At Visa, we believe in Ghana’s potential as one of our most important markets. Ghana’s rise as a regional leader in digital payments is no accident. Its vibrant economy, tech-savvy population and commitment to innovation make it fertile ground for growth, and Visa is proud to be a part of this journey. We are committed to working with our partners here to build a more inclusive and prosperous digital economy for all Ghanaians,” he said.