The internet has changed the relationship between consumers and physical money, and whittled down the importance of trading with physical money.

Ghana is shifting from the internet economy to a Digital Consumer Economy. There is need to simplify people’s daily lives.

Client’s personal behavior is being virtualized and mobilised by smartphones. Customers now prefer to conduct transactions on their smartphone devices with technology companies providing more convenient financial services using mobile internet.

Consumers now transact their financial business remotely through a variety of digital platforms: desktops, laptops, tablets, phones and even watches and glasses. Company needs to redesign its loan products delivery channels to reflect the present digital consumer economy.

The Covid-19 pandemic and its impact on e-commerce has encouraged a degree of international cooperation and further develop policies for online purchases and supply. The pandemic has made ecommerce an essential tool or solution, especially since e-commerce sales can support small and medium businesses that form the backbone of our economies.

This is expected to substantially spur the growth of digital payment methods across various economies. Globally, cardholder spending has been hit severely due to the pandemic.

With businesses expanding contactless payment options to invite customers, the contactless feature is observed to have become a USP for businesses across the globe. Owing to such developments, banks globally are expected to partner with mobile payment providers to expand their banking services.

Covid-19 and Global Policy Initiatives

The use of digital payment methods has improved post-Covid-19.

Covid-19 pandemic has encouraged the adoption of digital payments in Singapore, especially after the launch of a common QR code standard.

London-based Rapyd, a global Fintech as a Service company, announced a new Solidarity Programme to help Singaporean businesses quickly accept payments online with no fees until June 2022.

Governments are taking the initiative to introduce digital payment solutions. For instance, in August 2021, Indian Prime Minister Narendra Modi launched the digital payment solution e-RUPI, a person and purpose-specific digital payment solution.e-RUPI is a cashless and contactless instrument for digital payment.

Emerging economies and developing countries worldwide have observed prominent growth rates in the adoption of mobile payments, not only due to ease of performing transactions or penetration of smartphones but also because of the financial inclusion features offered by the technology.

The increases in international trade, internationalisation of production, and cross-border e-commerce suggest that demand for digital cross-border payments will continue to grow globally. Globally, financial institutions adapted their systems and processes to safeguard payment systems from emerging threats.

Some of the financial institutions replaced their legacy systems, while others collaborated with FinTechs and mobile money operators to offer innovative products and services. There are regulatory reforms globally to create enabling payment environment in many countries.

Some countries initiated policies such as regulatory sandbox to nurture FinTechs, while others enacted new payment laws to engender competition and permit non-bank entities to play in the payment ecosystem. Regulatory Technology (RegTech) solutions are also being implemented by some countries to enhance their supervisory frameworks.

Digital banking emerged in Ghana around 2008 after the arrival of the Nigerian Banks who had then developed web-based platforms to assist businesses to manage their revenue collections and payments seamlessly. By 2010, MTN, Vodafone, Airtel and Tigo dominated the Electronic Money Issuer ecosystem with their Mobile Money (MoMO) in collaboration with a number of banks.

MTN MoMo, Airtel Money, Tigo Cash and Vodafone Cash serve the consumer with their cash-in and cash-out services. Since 2016, Bank of Ghana has been playing major policy reforms to ensure secured digital industry in Ghana. Today, Ghana has five Dedicated Electronic Money Issuers, 41 Payment Service Provider(PSPs) and one Payment and Financial Technology Service Provider.

In 2019, the BoG facilitated the passage of the Payment System and Services Art, which guides the payments system landscape and also permits non-bank entities to operate in the payment ecosystem. A cyber security directive was also issued by BOG to payment service providers. The directive provides a framework for PSPs to implement cyber security measures to safeguard digital payments.

An Open Application Programming Interface (API) system also created opportunities for (FinTechs) to improve their products’ time to market, reduce development cost, enhance product flexibility and improve market competitiveness.

FinTechs, over the years received and continue to receive significant Government support in ICT infrastructure. The retail payments interoperability project was completed and helped to enhance the overall efficiency of retail payments. Funds are transferred seamlessly from one mobile money platform to another.

Similarly, funds are transferred from mobile money wallet to bank account and vice versa. The E-Zwich payment system was integrated with mobile money wallets, while a prototype agent registry was developed for the payment ecosystem.

Migration of the payment card industry from magnetic stripe technology to Europay Mastercard Visa (EMV) chip and PIN technology was completed in the first quarter of 2018, Most banks’ cards and systems are EMV compliant. BOG approved QR Codes and Near Field Communicator (NFC).

Ghana has widespread QR Codes; all Schemes have their own QR Codes, Banks have their proprietary Gh QR Codes, and GhiPPS has its own. Efforts at ensuring development of the FinTech industry culminated in the establishment of the Ghana Chamber of Technology as its umbrella body.

The chamber provides a forum for FinTechs to share experiences and also serves as a single point of interaction with the Bank.

The digital sector saw development of innovative products and services in the payment ecosystem, leading to improved access to micro loans, insurance, savings, investments, and pensions. Financial institutions, FinTechs and mobile money operators collaborates to introduce products that provides convenient means of payment for consumers and brings the unbanked into the financial system.

Some of the services that were provided by FinTechs in collaboration with financial institutions in 2018 included digital savings, credit scoring, agency banking, electronic payments, integrated Know Your Customer (KYC) solution, investment, pension and insurance BoG has in 2018, approved 27 products and services for 16 financial institutions compared with 38 products and services approved for 21 institutions in 2017.

The approved products were mainly in-bound remittances, agency banking, mobile banking services and mobile money pension service. The completed National Financial Inclusion Development Strategy outlines the necessary actions required to increase the pace of adoption and take up of technological innovations in mobile phones to suit the youthful population of Ghana.

BoG has formulated payments systems strategy to fast track developments in the electronic payment space to help achieve the national development strategy’s objective of increasing financial inclusion from the 2017 level of 58% to 75% in 2023. Several projects geared towards fostering financial inclusion include, Mobile Money Interoperability involving; interconnection of the mobile money platforms and the Ghana National Switch (gh-link)