Reconstructing the old banking system
Now, Automated Teller Machines (ATMs) cards are used to withdraw money from the Teller-Machines, make payments on Point-Of-Sale devices and on the Internet, both locally and globally.
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But the adoption is not widespread and the frequency of usage is low because people still use cash for most of their transactions.
Traditional banking system
Existing banking system dictates that to be able to reach more people, a bank must open new branches in the communities where the people are located or where brisk economic activities take place. Most banks boast of the number of branches they have built instead of the innovative technologies they are using to enable people to enjoy the banking services.
Technology disruptions
Facebook, with over 1.44 billion active users, will soon deploy payment feature on the Messenger so people can send and receive money, starting from the USA. Last year, Rakuten Bank of Japan launched Transfer by Facebook to allow its customers to transfer money to their friends on Facebook by logging through the bank’s mobile app. This means traditional money transfer services such as Western Union, Moneygram, WorldRemit, and others are on ‘death-roll’ if they do not partner or position themselves properly. Facebook is the most visited website in Ghana and this service can be deployed soon.
Mobile money: Bank of the future
The mobile phone is fast becoming the mobile banking device used by people who were, hitherto, unbanked. It means their mobile phone numbers will be their account numbers or mobile wallets, virtually. Ghana can integrate more unbanked people into the banking system by adopting this service, having over 30.6 million mobile subscriptions.
MTN Mobile Money, Airtel Money and Tigo Cash are the biggest mobile money service providers in Ghana. MTN Mobile Money is the market leader with over 5 million mobile subscribers transacting businesses on the platform every month; with over 2 million of them registered. Obviously, traditional banks are threatened by the sudden success of mobile money services in Ghana though some of them have partnered these service providers.
Rumors abound that the Bank of Ghana is working assiduously to adopt it to drive the cashless economy agenda by licensing the mobile money service providers to become financial service providers.
According to a GMSA Industry Report on Mobile Financial Services, there are over 255 mobile money services globally in 89 countries; and available in over 60% of developing countries. It can boast of over 103 million active accounts as of December 2014. The cost of transacting business via the mobile money services is cheaper than the traditional banking system.
A lot of Mobile Network Operators (MNOs) are going into mutual partnerships to facilitate the seamless and cheaper movement of money across their networks. MNOs in Tanzania, Pakistan and Sri Lanka have interconnected their services to allow their customers to move money.
