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September 2018 in Singapore Can Ghana become Africas next mobile money success story?

Across sub-Saharan Africa, digital financial services (DFS) is the new-age means to manage personal finances. Mobile wallets and digital payments are fast becoming the trusted and secure way to engage millions across Africa who were previously excluded from access to formal banking services. It is not breaking news that Kenya took a shine to digital financial services: the success story of Safaricom’s M-PESA service is an exemplary model for other emerging markets, in particular Ghana.

What’s going on in Ghana?

Just like many other developing countries, the launch of mobile money options in Ghana initially received a lukewarm reception. In 2014 only 13% of adults in the country owned a mobile money account. Fast forward to 2017 and ownership levels have increased to 39%, making Ghana one of the fastest growing markets in sub-Saharan Africa. With a 30 times increase in active mobile money accounts since 2012, Ghana has experienced a remarkable surge in mobile money adoption, thanks to favourable reforms to regulation.

2015 saw the adoption of the revised version of official guidelines, permitting Mobile Network Operators (MNOs) to own and operate mobile wallets under the supervision of the Central Bank. This liberated telcos in Ghana to expand into digital financial services and created a positive effect on the market.

Now mobile money accounts for 61% of e-commerce sales in Ghana, surpassing cheques and credit cards to become the leading method for non-cash payments. Mobile money has boosted financial inclusion in the region to 58% and introduced formal financial empowerment to the masses.

To what extent can Ghana emulate Africa’s digital financial leaders?

Kenya is no doubt the market leader for mobile money globally, with the M-PESA mobile wallet being commonplace for over a decade for its  20+ million active users. Across all mobile money players, Kenya has over 34 million subscribers and 165,000 active agents. Whilst Ghana’s mobile money prevalence is around a quarter of that in Kenya, there is major potential for further growth.

Looking ahead, Ghana is already DFS-ready with a promising rate of mobile phone ownership (the first step for growing digital financial services), a 124% SIM penetration rate (compared to Kenya’s 78%), and the majority having proper identification and paperwork to open personal financial accounts. There also appears to be a rising curiosity and willingness from young Ghanaians to utilise mobile money and digital payments, going hand in hand with better financial literacy. In addition, stakeholders in the market are working on mobile money interoperability to further broaden the reach of mobile money through cross-network transactions.

Global Money Transfer Operators (MTOs) have observed the positive uptake of DFS in Ghana and have extended their services to send international money transfers to mobile wallets directly. Digital wallets are facilitating in sustaining this growing demand – last year alone, Ghana received almost $22 billion in remittances from abroad. With the majority of the Ghanaian diaspora located in USA, UK, and Nigeria, the highest influx of remittances is also coming from those respective countries.

Ghana’s total mobile money transactions almost doubled last year to $35 billion, and the market is still nascent. With the already-established tools and measures, ranging from good KYC measures to expansive coverage in place, Ghana is primed to follow in Kenya’s footstep to become another African digital financial success story.

At TransferTo, our cross-border digital payments network has opened up access for millions across the globe to send directly to mobile wallets in Ghana through our partners. To find out more about our network and sending to Ghana, click here.

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