Fifteen years ago, MTN Ghana introduced an unforgettable financial service relief, called Mobile Money, to the Ghanaian public.

The landscape of financial transactions took a digital transformation, following mobile progress, with Tigo and Airtel, now AirtelTigo launching a similar operation in 2012, and Vodafone, now Telecel, in 2015.

This digital innovation has since become a foundation, on which Ghana's digital economic set-up has been built.

From traders to students, how Ghanaians interact with money has been altered forever.

Before MoMo: A Dark Time of Traditional Banking and Physical Cash

Before the Mobile Money era, financial transactions and management in Ghana were predominantly handled through traditional banks and cash in hand.

Afia Nkrumah, a middle-aged trader in Oforikrom, vividly recalls the pre-MoMo dispensation and the inefficiencies of the time.

“At first we used to physically give money to people to give to others. Then MoMo came and I didn’t have it, so I used the same method. Sometimes the money doesn’t get to the intended receiver. Sometimes too, not the full amount is received,” she said.

This system was not only fraught with risks and inefficiencies, but a burdensome inconvenient situation.

Sammy who is now a Mobile Money vendor, recounts his experience as a mobile money vendor for over a decade.

“Of course, in the past, when one wanted to do a transaction, unless you went to the bank, you had to take your ID cards. They will be asking a whole lot of questions about it before they give you money or transact. Your own money too, all the stress. Sometimes you’d get there and they’ve closed or there is a challenge with their system, you can’t treat emergency situations,” he said.

The beginning of Mobile Money

Currently, an electronic way to send, receive, and save money securely through one's mobile device is what is being offered as Mobile money.

Sammy, with over a decade of experience, says the experience has been filled with conveniences.

“I have operated for almost 13 years now. The journey has been normal. Mobile has helped Ghana a lot. But now, when you have your phone, it's very convenient. The person just sends them, you go to any momo agent, you do the transaction and you are free to go,” he said.

The adoption rate of mobile money has been phenomenal.

Up from 350,000 subscribers in 2012, 4 million in 2017, registered users of mobile money stand at 73 million at the end of 2024, after a steady climb from 65.6 million in December 2023.

According to the Bank of Ghana’s 2023 Payment Systems oversight Annual Report, total volume of Mobile Money (MoMo) transactions recorded in 2023 peaked at 6.81 billion from 5.07 billion in 2022.

This growth signifies not just an increase in transactions but a cultural shift towards a cashless society, enhancing financial inclusion dramatically among diverse levels of societies.

Successes and Transformations

MoMo has been pivotal in reducing the unbanked population from nearly 60% in 2014 to 32% in 2021.

On the back of an enhanced interoperability between networks, increased transaction volumes, and public finance service integration, constant users like Afia, say MoMo has become a convenient savings tool.

“It has really helped that I send money to my mom easily. We used to save money in our bedrooms, dig holes and put the money there. But with momo, you just cash in and it remains there, and can be used as a savings account. I think I have been able to save money because of that. I spend money unnecessarily when I hold cash, but that has changed now,” she said.

For tertiary students like Josephine, MoMo is a time-saver and a tool for financial management that allows her to handle her finances with ease and security.

The transaction between her and her guardians, she says, has been bridged.

“Momo saved me a lot of time, provided me with convenient ways to send and receive money, especially receiving money from my parents. When you are asked to buy books, or pay dues, mobile money has always been there.

“It has impacted my life and helped me to stay organized in handling money. Not every day, but in a day I can do like two or three transactions, with the money not exceeding 300 Cedis with ease,” she said.

Challenges in the Mobile Money System

Despite these success stories, new visible and inflicting challenges are breaking positive blocks of the financial inclusion set up.

Ella Baby's experience with mobile money was marred with a mobile money scam.

Fraudsters utilized the reliance on electronic financial services to skew users off their fortunes.

“I got a message that read that I had received GHS780. Within minutes, I received 3 calls from an unknown number. I wanted to confirm this so I checked my MoMo account balance which apparently was empty. If I was not smart, he would have defrauded me,” Ella recounts.

MoMo agent Sammy recounts how fraudsters have been undermining his momo business.

He decries the failure of telecommunication providers to further secure users.

“Fraudsters are ruining our business. They have devised so many means of tracking people and defrauding them. And even though the SIM is linked with a Ghana card, the telcos can't even track the person to retrieve the money for you. So our customers are losing their funds to that,” he said.

Mobile money fraud is just one issue. Regulatory hurdles, like e-levy and financial literacy gaps, block mobile money growth.

The Way Forward: Policy, Sustainability, and Inclusion

Economist and financial analyst, Dr. Evans Nunoo, discusses public and private policy directions that can enhance the adoption and equitable use of mobile money for underserved populations.

Dr. Nunoo says mobile money reach and effectiveness will be achieved with economic policies that tailored services specifically for mobile money agents, users, underprivileged populations.

“We could have subsidized transaction costs for low-income users to encourage usage in rural areas especially farming communities. That way, vulnerable people are given lower fees and the rich will pay more. Also with proper interoperability, transfers across networks will come with no difficulty and no extra charges.

“In many rural areas, agents can’t even withdraw 500gh for you. Agent networks should be supported with local banking institutions providing liquidity support to them and through subsidies, and incentives for agents.

“We can also look at digital literacy programs to empower and whip up the unaware population. There can be heightened interest for women, rural populations, and elderly. And also with eased systems retrieve monies and strengthen consumer protection laws to address issues like fraud, data privacy and dispute resolution,” he said.

In quest to reach the last population and widen financial inclusion, the sustainability of mobile money services comes into discussion.

Dr. Evans is emphasizing the need for telecommunication outfits to diversify their mobile money platform services to incorporate financial support schemes.

“We can attempt to diversify mobile services by strengthening their microloans, and have a savings account with interest, like we do for treasury bills. This is a very good monetary policy that if rural folks and the unbanked endorse it, will allow the government to stabilize prices and other macroeconomics indicators. We can enhance the insurance bit. So people don’t go to offices just to renew their insurance.  Collaborations between government and fintech companies can create innovative financial products to serve the needs of underserved communities. We can also expand mobile network coverage including internet access in rural areas,” he said.

The potential impact of an effective and efficient mobile money services and coverage cannot be overemphasized.

The higher the penetration levels, the higher financial services are accessible and peak inclusion is achieved.

Economist, Dr. Evans Nunoo is stressing the advantages of macroeconomic impacts of increasing mobile money adoption in Ghana.

He explains the state of a reliable cashless financial regime could boost GDP, employment, and reduce poverty.

“When we are able to streamline financial transactions it has a positive relationship with economic growth because of increased economic activities and output in general. From mobile money agents to fintech developers are presented with direct and indirect opportunities such as entrepreneurs leveraging mobile money for business.

“Once users can borrow money on your wallet if that is done properly and petty traders are provided microloans, access to credit and savings will solidify an enabling environment for small-scale entrepreneurship. Again, financial inclusion has formalized the informal sector in Ghana through Momo,” he said.

The efforts of addressing the challenges of mobile money services are a transformative way to harness MoMo's potential. The largest responsibility falls on service providers and public authorities to provide equitable economic growth and inclusion.

This report is produced under the DPI Africa Journalism Fellowship Programme of the Media Foundation for West Africa and Co-Develop.