The financial services sector has today achieved a great milestone with the introduction of a funds transfer service that will enable cash to move from a bank account in a bank to an account in another bank which the recipient can access instantly just like a mobile money transfer.
This is a marked departure from the current system where such interbank transfers or direct debits become available to the recipient between 24 hours and 48 hours. The instant transfer service, therefore, ushers Ghana’s economy more deeply into a cashless society.
The GhIPSS Instant Pay (GIP), which enables banks to effect instant transfers from one account to another, irrespective of the bank, and the gh-link E-commerce, an online payment system, are two products the Ghana Interbank Payments and Settlements System (GhIPSS) hopes would further facilitate a massive shift from using cash and paper means to effect payments to the use of ‘clicks and electronic’ channels.
Launch and stakeholder endorsements
The Governor of the Bank of Ghana (BoG), Dr Henry Kofi Wampah, who launched the products in Accra yesterday, expressed the hope that the introduction marked the beginning of an era when “banking halls will be significantly empty” with more people resorting to the use of electronic payment platforms to complete transactions.
The two products instantly received endorsements from various stakeholders such as the Ghana Association of Bankers (GAB), online e-commerce merchants, public sector agencies, large and small organisations and companies, as hopes were raised about a new dawn of e-payment systems in the country.
Although e-commerce (the buying and selling of items online) is booming in the country, the associated payment systems have been slow to develop. The gh-link E-commerce is seen as a perfect solution to that challenge. Similarly, corporate and individual customers of banks are able to make direct debits and credits between 24 and 48 hours through the GhIPSS Automated Clearing House (ACH).
Dr Wampah declared: “This is the way to go and I entreat banks which have not signed on to quickly do so. I also entreat public sector institutions such as the Registrar General’s Department, the utilities and the Controller and Accountant General’s Department to avail and ready their systems to receive and effect instant transfers to enhance the efficiency of their operations.”
Benefits for economy
The governor made it clear that the objective of the Bank of Ghana, which wholly owns GhIPSS, was to move the economy into a cash-lite society with an agenda to make e-payments the norm, rather than the exception.
The Chief Executive Officer of GhIPSS, Mr Archie Hesse, told the Daily Graphic, shortly after the launch that the instant pay would enable individuals and businesses to effect payments instantly, a sharp departure from the past when such transfers were dear.
“At the moment we have the ACH direct debit, same day or next day, but we don’t have an instant pay and this is an opportunity,” he said.
The GhIPSS CEO explained that the service was demand-driven as banks and their clients had been calling for it.
The service also complements the automated teller machine (ATM) services with the online payment option.
What’s in it for banks
The Managing Director of the GCB Bank, Mr Simon Dornoo, who spoke on behalf of the GAB as its president, called on banks to buy into the service and devote resources to promote it for it to become accepted.
Mr Dornoo said driving traffic through GIP would, therefore, increase cash flow in the banking system, which would be to the advantage of banks and the society, stressing that “losing money to robbers, fire or fraud is now self-inflicted because keeping money in the bank is as good as having it in your pocket.”
An Information Technology expert and a member of the GhIPSS board, Dr Nii Narku Quaynor, in an interaction with the Daily Graphic, said he was optimistic that the service would catch on well with patrons and promote e-commerce and cashless transactions mainly because the unavailability of pervasive payment systems, which posed challenges, had now been resolved.