Use purchasing power to promote cashless society – Gov’t urged

The central bank is taking steps to promote a cashless society. But what is required to make it a reality as it is in the case of others developed countries. Charles Benoni Okine reports.

The Head of Sales and Distribution Executive of MTN, Mr Ebenezer Asante, has suggested to the government consider using its own purchasing power to radically promote cashless payments as a first step to promoting a cash free economy in the country.

Consequent to that, he said there is the need for clear policies to allow players in the telecom industry to follow a structured system that will enable the people to achieve the full benefits of a cashless.

“We need clear including a national policy that encourages more electronic-based transactions, while discouraging physical cash usage and circulation economy”, adding that “Given the benefits a cashless society affords us, it is important that we continue to do all we can to encourage a cashless economy based on technology”. 

Mr Asante made the call at a special forum at the instance of the leading telecommunications company in the country, MTN on the theme; “Building a cashless Economy in Ghana: Prospects, Challenges and the Way Forward” in Accra on Friday.

Ghana’s neighbor, Nigeria is said to have already set an example when the Central Bank instituted a cashless economy policy to: drive development and modernization of Nigeria’s payment system in line with the country’s vision 2020 goal of being amongst the top 20 economies by the year 2020; reduce the cost of banking services (including cost of credit) and drive financial inclusion by providing more efficient transaction options and greater reach; improve the effectiveness of monetary policy in managing inflation and driving economic growth; and curb some of the negative consequences associated with the high usage of physical cash in the economy.

The Nigerians are of the view that an efficient and modern payment system is positively correlated with economic development, and is a key enabler for economic growth

Mr Asante pointed out that “While we are by no means prescribing the details of the Nigerian policy and its implementation process as a silver bullet (given the inherent problems), we believe a policy that prescribes a structured approach is a step in the right direction to a well thought-out, properly sequenced cashless economy implementation”. 

In the area of infrastructure he said there in the need to also support the implementation of a cashless system with proper infrastructure and systems to the point where “we are ready for a cashless economy, and electronic transactions are truly ubiquitous and sustainable”.

He said it should be such that everyone – retailer, service provider, consumer or business – can have the option to transact electronically regardless of location, or even time.

Against this background, “it means that the technology coverage must be adequate, as well as other supporting structures such as energy availability for consistent connectivity and reduced downtime and in the long term, we should be driving towards universal access and convergence to all forms of cashless mode of payments – All ATMs/ E-Zwitch/Mobile Money must cross-transact”.

Mr Asanate also stressed the need to have secure systems that allow citizens to transact without worry of identity theft or other cyber fraud is critical and noted that “so we must ensure our electronic transaction/payment systems and processes are truly secure.”

“Since MTN rolled out MTN Mobile Money, we have experienced some resistance from prospective users simply due to the fact that as a country we are used to a cash culture”, he said. 

Mr Asante noted however that, “it has been our experience that once people start using Mobile Money they wonder why they did not start to do so sooner; This tells us we must have a singular focus on educating people about the full benefits of a cashless economy – the benefits afforded them as well as the benefits afforded the country as a whole”. 

Perhaps government should consider using its own purchasing power to radically promote Cashless payments as a first step. MTN commits to continue its investments in this regard; to make Mobile Payments popular, acceptable and trusted nationwide. This is our commitment and we shall lead the way.

MTN perspective of Mobile Money

Mr Asanate said mobile money services have transformed the way in which people handle their finances, allowing people to transfer money, make purchases and pay bills with a few key strokes on their mobile phones.

According to a research report by Aite Group, mobile payments will reach $214 billion in gross dollar volume in 2015, up from 16 billion in 2010 which represents a 68% compound annual growth.

In July 2009, MTN Ghana introduced MTN Mobile Money, which provides customers with immediate access to banking services through their mobile phones.  In 2012 (three years later) it projected to record about 13.5 million transactions totaling over GHc 300million which represent over 265% growth in the value transacted.

History of cashless society

The history of money has evolved over time and what is in the system today is the result of many years of innovation; innovations that have been in response to the changing needs of mankind and the need to find solutions outside our limitations.  

Centuries ago, a cashless society began mainly on barter; gift economics and debt, and then evolved to the use of money. 

Today, technology now offers mankind the opportunity to go back to being a cashless economy, albeit a more efficient one that is not based on barter and gift economics, but allows people access to fast, safe and convenient transactions. 

Already, people carry phones and wallets wherever they go and this, Mr Asante asked why people cannot take advantage to use the telephone device and other smart cards as the medium of financial transactions, for the efficiencies “we get from the ability to transfer money seamlessly, pay our bills and purchase goods and services without having to carry money around.”