Instant Pay to help keep money within banking sector

The newly introduced GhIPSS Instant Pay (GIP) could significantly address the long standing concern of people keeping money outside the banking sector. This is according to the Chief Executive of the Ghana Interbank Payment and Settlement Systems (GhIPSS), Mr. Archie Hesse.  

Ghana still has a huge unbanked population and some experts have argued that business people prefer their money around them because they may not have full access to their funds all the time, if it was in the bank. But with the introduction of the Instant Pay, “money at the bank is as good as money in your pocket”, Mr. Hesse explained. He stated in an interview, that with the new service, people can transfer money from their accounts to another without going to the bank and the recipient will receive it instantly.  

The GhIPSS CEO is therefore urging banks to market these features of the Instant Pay to the public, in order to encourage people to keep their monies in the bank. “ I think banks have the strongest message ever to convince the public to keep  their monies with them because they can access it easily with the Instant Pay and several other payment options”, he stated.

It is believed that part of the reason why borrowing from the banks is expensive, is because there is not enough money within the banking system, as the unbanked population remains high. Banks are therefore compelled to take money from wholesale depositors at higher rates for on-lending. Experts suggest that if more money is allowed to stay within the banking system, banks will have access to more funds at cheaper rates and on-lend to the public at an equally lower rate. 

Mr Hesse is therefore encouraging banks to package GIP and the plethora of payment options and use them to attract the unbanked population. “Today, it is easy to access your money at the bank and this message should reach the public more forcefully”, he stressed.

GIP is part of efforts by GhIPSS to modernise the country’s payment system in line with the cash-lite agenda.