Electronic payment, another use of mobile phone technology

One of the most laudable benefits showing from the recent redenomination of the Cedi has been the drastic cut in the sheer volumes of physical cash which Ghanaians were obliged to tug about for payment for goods and services in their day-to-day affairs.

Until July 2007, a simple transaction such as the payment of a rent advance of, say, 15 million cedis by an “un-banked” tenant to an equally un-banked landlord came with serious security and time implications; that amount, in the old currency, was simply so voluminous that conveying the money in public and counting it as payment were in themselves gruelling transactions.

But shrinking the volumes of the currency even at the same value turns out to be but a fraction of the remedy for a much bigger malady plaguing the local payment system and the way we generally conduct financial transactions in this country.

Be it re-denominated or not, why must anyone always carry large sums of paper money on their persons before they may conclude basic and routine transactions?

Even if the risk of loss or burglary were not real, why must I journey to some office at the other end of town, my pocket or wallet stashed with cash, just to pay off my water or electricity bills or any other utilities for that matter?

Why must I personally show up at some counter or entrance to offer paper money as payment for simple recreational services like theatre, a concert or direct satellite television?

And why must I have hard cash on my person before venturing into my regular supermarket for domestic supplies? We may very well wonder why, in 21st Century Ghana, every little transaction is still so rigidly cash-based.

The stark fact is that, Ghana has lagged way behind most of the world (including many of its peers in Africa) in the general quest to boost micro economic activity by reducing the role played by physical cash in daily transactions and by encouraging the creation of a cashless society.

Indeed some ground-breaking initiatives like the marginal use of credit and debit cards and especially the introduction the E-Zwich are commendable.

However, experts in the financial sector have stressed that unless something radically innovative, functional and savvy is introduced, which accounts for attitudes as well as the huge un-banked population, the country's dream of building a functionally cashless society in the shortest possible time could be elusive.

As many as 80 per cent of Ghana's population neither has nor operate a bank account, although the majority of the “un-banked” are economically active in either the formal or informal sectors of the economy.

Easing the Cash Burden

Banked or “un-banked”, it is obvious that the active population is now hurting under the burden of the inconveniences and constrictiveness of having to endure heavy, cumbersome and usually unsafe cash-based payments in their day-to-day affairs and transactions.

Unfortunately, alternative modes of payment like credit cards, direct debit cards and even the relatively common bank cheques, all of which are far less reliant on cash, are so miserably limited in use and unpopular on the Ghanaian market that they hardly make any significant impact on the efficiency and ease of transactions.

In 2008 when Afric Xpress, a global electronic payment solution specialist, introduced itself onto the Ghanaian market, announcing its mission of introducing a fast, reliable and convenient electronic-based payment system to transform lifestyles and the way Ghanaians conducted everyday business, there were no sceptics at all, except for the many market watchers who wondered just how this could be done – given the fact that not enough Ghanaians (only 20 per cent of the population) were formally hooked onto the banking system.

Fortunately, Afric Xpress' primary working tool does not necessarily require the individual to own a formal bank account before enjoying the convenience of electronic payment; it is a surprisingly common device which everybody now carries and which has suddenly become one of man's most indispensable personal accoutrement in everyday life – the cellular or mobile phone.

The Change Agent
In very sharp contrast to the rather negligible size of Ghana's banked population, there has been a phenomenal growth in the use and popularity of mobile phones.

With permissible reference to the swarm of mobile telephone service providers streaming into the country, and the “aggression” with which they market their products, it may be fair to state that Ghanaians appear to have overtaken the rest of the world in embracing this incredible technological breakthrough of the last century.

From the pitiful national tele-density status of just about 0.7 per cent in 2000, Ghanaians' access to telephones rapidly soared to 5.5 per cent by the end of 2003; at the close of 2008 Ghana's tele-density had sky rocketed to the region of 50 per cent.

National Communications Authority (NCA) figures point to an exponential growth in the number of mobile phone subscribers from 7,604,053 at the beginning of 2008 to 11,302,647 subscribers by December 2008.

This literally means that at least a whopping 11 million people, out of Ghana's population of 22 million, now carry and use cellular or mobile phones.  Continued    Source: GNA - Ghana News Agency

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