Interview: Archie Hesse
In what ways should the roll-out of electronic payment platforms differ in Ghana’s rural areas?
ARCHIE HESSE: Any technology roll-out in rural areas must be done in full consideration of the applicable limitations such as a lack of reliable power and telecoms, as well as a high illiteracy rate. Simple, adaptable and userfriendly technology will therefore be key in reaching those areas and engendering adoption and usage. Examples of the kind of technology that should drive the deployment of payment systems in rural areas include biometric authentication instead of PINs in the case of cards, terminals with voice instruction, batterypowered devices, systems that can run both on- and offline and unstructured supplementary service data solutions in the case of mobile phones.
As rural areas are largely underserved by financial institutions, the best way to deepen financial inclusion is to adopt “branchless banking”, whereby merchant agents and other intermediaries act on behalf of financial institutions. These measures take time to put in place and require serious coordination among stakeholders.
How do businesses view their reliance on cash?
HESSE: I believe that few businesses really appreciate the true cost of heavily relying on cash for transactions because it has always been the norm; however, the cost of cash should be a national concern. It is a cost not only for businesses but also for financial institutions that provide cash collection services. Using cash for transactions requires both parties to be physically present, which is more inconvenient and less efficient, especially considering the time and risks associated with commuting. On the national level, a good amount of foreign currency is spent printing new notes to replace those worn out from poor handling.
To address these concerns, GhIPSS was created with a view to providing the necessary infrastructure to drive electronic payments. We have since introduced various payment platforms, the latest of which is Instant Pay. This new service is designed to facilitate prompt business-to-business, person-to-person and person-tobusiness interbank transfers.
To what extent can card payment systems help increase banking penetration in the country?
HESSE: Financial institutions must create an environment that enables individuals to keep money inside the banking system, as access to funds is fundamental to the success of any card payment infrastructure. One of the reasons that people keep cash at home is a lack of banking convenience. If financial institutions cannot guarantee 24/7 access via service channels such as point-of-sale devices, ATMs, online payments or mobile phones, most people will opt to keep their cash out of the banking system. As such, providing transactional infrastructure is necessary for increasing access to funds and therefore banking penetration.
Why is mobile money growing modestly in Ghana?
HESSE: Any new product takes time to be accepted. Technology products like mobile money require a change in behaviour and will therefore experience initial inertia before gaining widespread acceptance and use. In Ghana, the initial regulation guiding the establishment of mobile money recommended a model whereby banks and telcos interoperated; however, this failed in practice. The landscape became fragmented, with each telco offering the service only within its network. I believe this lack of interoperability has impacted growth.
Using the case of Kenya as an example is not very useful for Ghana. Their service started in the absence of regulation and greatly benefitted from the fact that many Kenyans worked in one place and lived in another on weekends. This created a clear need for easier money transfers, which Safaricom readily addressed.
Telcos are working to drive local adoption and I think it is beginning to pay off. It is fast becoming a preferred mode of money transfer between individuals and efforts to further integrate telcos, banks and their agents should promote significant growth in the near future.
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