Riding The Tide: Emerging payments and doing business in Ghana

The world over, emerging payments are revolutionizing the financial industry. Emerging payments refer to new and improved ways of executing payment obligations in a fast, secure, easy, cost effective and intuitive manner with the use of technology. Over the last few years, there have been significant shifts in the payments landscape.

Traditional banks have invested heavily to facilitate the payments needs of their clients. The advent of mobile phones and the widespread nature of its adoption in Africa, together with access to data, has accelerated the involvement of other non-traditional players such as mobile phone companies and Fintechs.

The rise in the use of social media, Internet of Things (IoT), Artificial Intelligence and Blockchain means that more innovative and integrated payment platforms are being developed to meet the demands of users. At the end of the day, the type of payment mechanism adopted and used will be based on the needs of the clients in the Personal, SME and Corporates Banking arena.

Emerging payments technologies and solutions sit at the core of the transformation of the Ghanaian economy and has the potential to impact in all spheres of our lives from family support, tax mobilization, trade, e-commerce, health care, education, savings, insurance, wealth creation and access to credit. Taking healthcare as an example, we can use technology to ease the burden of patients and their families by automating their interaction with their respective health providers in a cashless manner, eliminating the need to queue whilst at the same time eliminating revenue leakage for the health institution.

Emerging Payment has facilitated E-Commerce in a big way – from giants like Alibaba, Amazon to the small Ghanaian businesses such as food vendors, dress makers, and carpenters.

The world’s most advanced economies have the largest proportion of electronic or digital payment in their payment’s infrastructure. The recent push by policy makers for digitization as a catalyst for economic growth in Ghana highlights the importance of emerging technologies in collections and payments for the growth of the Ghanaian economy. We are in the infant stages and the benefits are already clear to see. A lot of investments are still required by traditional banks, government as well as the Fintechs to fully leverage the benefits of the potential of emerging technologies for collections and payments. 

The ability of goods and services to move freely by leveraging on the emerging payments such as mobile banking apps, mobile money, etc. has contributed to job creation, increased sales, improved revenue mobilization and has had a positive overall impact on Gross Domestic Product (GDP). 

While acknowledging the strides made in integrating emerging payment solutions and platforms in the Ghanaian economy, especially on the use of mobile money, we must also admit that there is much more to be done. The role cash still plays in the Ghanaian economy is quite high and public education must be intensified if we want to turn this around.

Furthermore, the need for a synchronized ID system is critical for the successful operation of any emerging technology mainly because of the potential for fraud in instances where ID systems are not consistent and integrated. Finally, regulation remains key in streamlining the operations of operators within this sector as public confidence is critical to the success of any emerging collections and payments technologies.

By Musah Abdallah

The writer is the Head of Transactional Products & Services at Stanbic Bank Ghana