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Mobile Money Interoperability Now Here

botchway May 11, 2018

By Maxwell Ofori

The Vice President, Dr Alhaji Mahamudu Bawumia, has launched a service called Mobile Money Interoperability (MMI), which allows direct and seamless transfer of funds from one mobile money wallet across networks.

The will create convenience for mobile money users, drive financial inclusion, lower cost of transaction, increase service reach, reduce reliance on cash, and give 24/7 access to funds in wallets and bank accounts, amongst others.

At a ceremony yesterday to officially launch the service, the Head of the Economic Management team of the country, Dr Bawumia, noted that the MMI is a platform that provides a financial transaction engine that is versatile, efficient, robust, and enhances patronage.

According to the Vice President, the system will ensure financial inclusion, explaining that a large segment of the population is unbanked.

“This means so much money and savings are held outside the banking system. Banks can only lend out the savings of their depositors or what they borrow from the money market. If there are no savings (or placements) by depositors there can be no loans.

“The price of loans (interest rates), like that of any other good or service, is fundamentally determined by demand and supply. When the demand for loans increases relative to supply (savings), the price (the interest rate) will rise. In this sense, one should expect that in an economy where savings in the financial system are low for whatever reason, market-determined interest rates would be higher,” he remarked.

Dr Bawumia, a former Deputy Governor at the Bank of Ghana, exhibiting his knowledge in economics, told the dignitaries, made up of persons in the financial sector, that the importance of increasing the supply of savings in the financial system through making financial services available to the population has long been recognised.

He added that to improve domestic resource mobilisation, there are the usual recommendations for governments to improve the efficiency of tax collections, through reforms of the public financial management system, automation of tax administration, stemming capital flight etc.

However, he bemoaned that at the heart of the problem of domestic resource mobilisation is the highly informal nature of many economies, underpinned and supported by the predominance of cash transactions, as a result of financial exclusion.

What was launched yesterday, as the Vice President said, constitutes the Phase One of two phases of the interoperability payment system.

“After today, customers will be able to move freely monies from mobile money to mobile money accounts across different networks. This means that customers who have mobile money accounts with, say MTN, can easily transfer or receive money from other networks such as Tigo, Airtel or Vodafone, etc.

“Furthermore, after today, mobile customers can move money from their mobile money accounts to bank accounts without any hassle. Thirdly, after today, from the bank side, customers can move money from their bank account to mobile money accounts.

Giving his welcome address, the Chief Executive Officer of the Ghana Interbank Payment and Settlement Systems (GhIPSS), Mr. Archie Hesse, indicated that the Vice President charged the GhIPSS at the 5th Economic and Business Outlook Conference held in Accra to develop mobile money interoperability.

He also said that the initiative came at the right time, because there is no doubt that mobile money operations have revolutionised the financial transactions in the country since its introduction somewhere 2009.

“People have been able to receive money timeously and address urgent needs, such as medicare, etc,” he stated, while explaining the importance of this new system.

On his part, the Chief Executive Officer of the Chamber of Telecommunications, Mr Ken Ashibey, said it has been estimated that the system will ensure that much money was not spent on printing and managing cash, among other benefits.

Mr Ernest Addison, Governor of the Bank of Ghana, said considering the rapid growth from the mobile money transactions, the interoperability system was in the right direction.

He said the full implementation is expected to deepen further financial inclusion, adding that currently, there are over 25 million mobile money accounts, stating that it presents a huge potential for domestic revenue mobilisation.


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