The beginning of Fintech business in Ghana can be traced predominantly through the  operations of leading Fintech companies such as Etranzact Ghana Limited, a company that was set up in Nigeria in the early 2000s and had it subsidiary launched in Ghana in the mid-2000s.

It is significant to note that this period heralded the introductory stage of the Fintech Industry and set the tone for the roll-out of various digital financial services as we have them today.

 At the time, internet penetration was relatively lower than what we have currently and smartphones were not a common device to be found in every household. It was therefore not uncommon to find majority of Ghanaians relying on the usage of feature phones which meant that digital financial services had to be delivered to suit the relatively limited technology available at the time.

 I recall vividly how Etranzact Ghana Limited rolled out their digital financial services with the use of SMS syntax for termination of transactions as well as an Application which was agnostic with Java Platforms for transactions.

With the SMS syntax feature, consumers of digital financial services were mandated to type special messages with symbols through a short code to consummate transactions.

An issue of miss-spelling of any of the SMS syntax meant that no transaction could be facilitated. This was quite a laborious process as compared to the current systems we have today.

With the usage of the SMS syntax system, transactions such as Funds Transfer, Withdrawals, Balance Check, Airtime Top up as well as Bill payment all came with their peculiar SMS syntax for termination of transactions. This service which was a wallet platform but came with magnetic stripe cards meant that cash-in transactions had to be done through agency networks which were predominantly financial institutions.

 It is therefore safe to say that, earlier forms of the mobile money service came through this unique service which was offered by Etranzact Ghana Limited at the time.

The company utilized an encryption as well as a 2 Factor Authentication feature to ensure the service was safe from fraud which is still a standard feature in use today for digital financial services.

Mobile banking also gained root during the same period with key Banks such as United Bank for Africa, Zenith Bank and Intercontinental Bank (Now Access Bank) rolling out their services through Etranzact’s platform. These Banks also made use of the SMS syntax module as a key feature and relied heavily on Etranzact’s conventional offerings to serve their customers.

 The Fintech industry then had a major challenge with the marketing of products and services as innovators were the only ready target segment to focus on. The up-hill task then was to move the conversation from merely promoting digital products and services to educating customers about digital financial services products and services. These offerings challenged the conventional means of payment and the mass market reacted slowly to adopting digital financial products and service.

This was a challenge that meant the utilization of a blue ocean strategy to create a novel market from the traditional market that was used to the old means of making payment. A lot of movement and commute was associated with making payment and transferring money which digital financial products and services was to help erode in a positive light.

There was also a lot of fear with patronizing these digital products and services as majority of would-be adopters could not convince themselves their funds would be secure through the usage of the available digital financial products and services in spite of all the security comforts that were available at the time as aforementioned.

All funds were held then in trust accounts of partner Banks as per regulatory prescriptions and standard practice as we have today for mobile money services or electronic money issuer services.

 It is also important to emphasize that aside the utilization of mobile channels, other channels such as web also facilitated some transactions as well as Point of Sale Terminals.

Interoperability of ATM services was also present at the time between a few Banks - a launching pad that created the Gh-Link platform.

The Gh-Link platform then aided the connection of member Banks unto a single switch through the utilization of their unique Bank Identification Numbers. Customers of Banks could therefore withdraw funds through the use of other Bank ATMs they were not customers of.

The Ghana Interbank Payment and Settlement Systems Limited incorporated in May 2007 was the main facilitator of the Gh-Link platform and provided the mother switch for this service.

 By the late 2000s, MTN mobile money erupted with a lot of verve and would change the Fintech landscape forever albeit the introduction of the service came with a lot of challenges in marketing and in product penetration. The penetration of the service required a lot of investment and foot on the ground as there was a lot of confused positioning in the minds of would-be customers.

It took a lot of strategic initiative for mobile money to thrive and a new market to be born.

One thing is certainly clear, the beginning of the Fintech ecosystem which is near maturity today or at maturity, depending on how you look at it, saw a lot of stuttering in the beginning and the future story would come with a lot of success in weathering the challenges.

 To be continued…