The Bank of Ghana (BoG), in collaboration with the banking industry, is migrating, this year, from the Magnetic Stripe Standard for all payment cards to Europay, MasterCard and Visa (EMV) Chip and PIN Standard to enhance security and reduce fraud.
Dr Abdul-Nashiru Issahaku, Governor, BoG, who made this known in an address delivered on his behalf at the inauguration of the Payments Systems Council (PSC) in Accra, yesterday, also pledged the commitment of the central bank to developing an efficient payment system on account of its relevance to the economy and the promotion of financial sector stability.
Dr Issahaku noted that BoG, guided by a ten-year strategy document launched in the year 2000, embarked on payment systems modernization programme which recorded tremendous success including the Real Time Gross Settlement System (RTGS), Cheque Codeline Clearing with truncation (CCC), Automated Clearing House(ACH) for direct debit and credit funds transfers, and the e-zwich Smart Card payment systems.
He said in the year 2014, BoG launched a strategy document aimed at leveraging on the existing infrastructure and deploying new ones to promote the use and acceptance of the electronic medium of payments and financial inclusion, adding that the new strategy document was a product of extensive stakeholder consultation, guided by rapid development in Information and Communication Technology (ICT) and the high mobile phone penetration rate in Ghana.
Following the launch of the 2014 strategy document, he said, domestic and international payment service providers had shown keen interest in the country’s payment systems streams, with strategic alliances between banks, fintechs and mobile money operators in the roll out of innovative payment products unique to the African continent.
Dr Issahaku said notable among the many unique initiatives was an electronic payment product that had made it possible for low income earners to purchase Treasury Bills for as low as GH¢1.00 using the mobile phone and that the success of the product had attracted international attention in the form of requests from other central banks on the continent to come and study the design and its rollout.
He said enumerating the achievements of the payments systems sector would not be complete without taking account of the Mobile Money sub-sector, adding that since the passage of the Guidelines for Electronic Money Issuers in June 2015, the Mobile Money sub-sector had experienced a phenomenal growth, compared to that of peer countries.
He disclosed that in November 2016, Mobile Money float account balances with banks totaled GH¢1.01 billion compared to GH¢500.45 million in November 2015— an increase of 102%.
Furthermore, he said, international confidence in the payment system had also increased on account of a robust regulatory environment as Credit Cards issued in Ghana which were formerly not accepted for international transactions were now being accepted in Europe and the USA, among others, while a number of banks were also now issuing international Scheme Credit Cards such as Visa and MasterCards on account of the renewed confidence in the payment systems.
He added that the settlement of local Visa and MasterCard transactions were also now taking place in the country.
Dr Issahaku said notwithstanding these laudable achievements, cash still dominated payment transactions while a large number of Ghanaians were excluded from the formal financial sector.
According to the BoG Governor, a lot remained to be done to develop the payment system and that the establishment of PSC formed part of efforts by BoG to promote and guide the orderly development of the Ghanaian payment systems space and ensure a safe and efficient electronic payments environment that was inclusive and met international standards.
PSC is comprised of representatives of ten (10) institutions which include the Ghana Revenue Authority (GRA), National Pensions Regulatory Authority (NPRA), Securities and Exchange Commission (SEC) and the Controller and Accountant-General’s Department (CAGD).
The others are the Ministry of Finance (MoF), Ghana Chamber of Telecommunications (GCT), Ghana Association of Bankers (GAB), National Communications Authority (NCA) and the National Insurance Commission (NIC).
The Council is expected to support the achievement of sound and efficient payment, securities clearance and settlement systems by minimizing risks in the financial system, and promoting competition in the market for payment services, in line with the overall stability of the financial system.
It is also to serve as a forum for co-operation to facilitate enduring conditions in regional and international payment systems.
Source: ISD (G.D. Zaney)