Banks accused of violating Mobile Money Guidelines

The Ghana Chamber of Telecommunications is worried that banks in the country have chosen to violate the new E-money Issuers Guidelines while the banking industry regulator, Bank of Ghana looks on.

The violation is in respect of what the guidelines said about interests to be paid to mobile money customers.

Section 10 (5 and 6) of the guidelines clearly states that "E-money issuers (telcos) shall pass-through not less than 80% of the interest accrued on the pooled e-money float net of any fees or charges related to the administration of the pooled float accounts to e-money holders (customers)...Any amount in excess of the minimum of 80% interest (i.e. 20% or lower) may be retained by the EMI (telcos). Furthermore, interest generated on over-the-counter transactions which are not associated with a given customer account may be retained in by the EMI."

In spite of this obvious provision which allows telcos to keep 20% of interests on mobile money floats sitting with the banks and pay out 80% to their customers, the Ghana Association of Bankers (GAB) says they would rather pay 100% of interests directly to customers and not allow the telcos to keep the 20% stated in the guidelines.

The guidelines also stated they the banks should set separate accounts and pay all interests from the mobile money floats into it so that telcos can go into that account as and when they want to pay interests to their customers, but this, the banks have not done either.

Majority of banks in the country who understand the mobile money business are said to be willing to follow the provisions of the guidelines, but on the basis of the informed complaints of a few banks, the GAB has instructed all banks not to do what the guidelines said.

Chief Executive of the Chamber, Kwaku Sakyi-Addo told Adom News there is no justification for banks insisting on paying out 100% of interests to customers directly when the guideline is saying something else.

"The banks, telcos, Bank of Ghana and other stakeholders drafted the guidelines together before it was passed as law so it is a betrayal of trust for the banks to now turn around and insist on doing something different from what the guideline says," he said.

He said the telcos expect the Central Bank to insist on all parties upholding the provisions of the guidelines in the interest of the customers, who have, till date, been waiting for their interest but telcos have not been able to pay because the banks are in violation of the guidelines.

Adom a News gathered that many banks in the country are willing and ready to live by the provisions of the guidelines but for the directive of GAB based on complaints by two banks in particular.

Reliable information from those two banks also indicate that their mobile money platform managers are willing to live by the guidelines because they understand the industry but the CEOs of those banks are the ones fighting the whole process.

Kwaku Sakyi-Addo thinks the posture of the banks threatens the financial inclusion drive that informed the drafting of the new guidelines in the first place.

He noted that for years banks have held the cash floats from the mobile platforms but have not paid interest to customers, and now that the guidelines require them to do so and also provides how it should be done, some banks are resisting it.

Kwaku Sakyi-Addo is therefore calling on the Bank of Ghana to intervene and ensure the banks do the right thing.


Mobile Money usage doubles in 12months

The number of Ghanaian adults with active mobile money accounts has doubled in the past year, and now stands at 17 percent of the adult population according to a new World Bank study on financial inclusion.

The study conducted by the World Bank's Consultative Group to Assist the Poor (CGAP) said Ghana's progress on mobile money is commendable, especially as the service was introduced barely half a decade ago.
According to CGAP Ghana is "the most digital financial services-ready country in Africa" when it comes to the key elements required for successful adoption: 92% of adults have the required ID necessary to open an account and 91% of Ghanaians already own a mobile phone (compared to only 74% and 72% in Kenya and Tanzania, respectively).

The Ghana Chamber of Telecommunications joined key stakeholders at a dialogue session organized by the World Bank Ghana office on Thursday 22nd January 2016, to discuss and deliberate on key findings, opportunities and challenges for mobile financial services.

Mobile Money Momentum in Ghana

The patronage of mobile money continues to gain momentum, as for the third year running the value of transactions has seen an astronomical jump — from GHC2.4billion as at 2013 to about GHC11.6billion in 2014, according to the Central Bank.

The value of mobile money transactions when put into perspective is more than a third of the total deposit liabilities of the 28 banks as at the end of last year, and shows the vital role telecom companies are playing to advance the central bank's cashlite economy agenda - and also ensure that the push for more financial inclusion is brought into the hands of millions of Ghanaians.

Currently, four of the six mobile telcos - MTN, Airtel, Tigo and Vodafone - are involved in the mobile money business, which has grown from a transaction value of GHC171million in 2012 to the multi-billion cedi sector it is now.

Other companies such as Afric Xpress and e-Transact Ghana are also riding on the back of mobile phone popularity with the country's estimated 26-million population, offering various services which allow people to remit money to relatives and friends through the device.

The growth of the transactions' value over the years corresponds with a similar trend in the volume of transactions. So far, the number of transactions has almost quadrupled since 2012: from 30 million to about 106.4 million in 2014.

About CGAP

CGAP (the Consultative Group to Assist the Poor) is a global partnership of 34 leading organizations that seek to advance financial inclusion. CGAP develops innovative solutions through practical research and active engagement with financial service providers, policy makers, and funders to enable approaches at scale. Housed at the World Bank, CGAP combines a pragmatic approach to responsible market development with an evidence-based advocacy platform to increase access to the financial services the poor need to improve their lives.

Source: Telecoms Chamber Communications Desk