MTN To Begin Interest Payment On Mobile Money

The Deputy Head of Payment Systems at the Bank of Ghana (BoG), Mrs. Clarissa Kudowor said the Central Bank has concluded plans to issue the green for the payment of interest to holders of Mobile Money (MoMo) accounts by the operators this year ending.

She said this at the MTN Mobile Money Month 2016 stakeholder conference in Accra under the theme, “Let’s Go Cashless with Mobile Money Supported by an Enabling Regulatory Environment.”

The MTN Mobile Money which became the first mobile money service in Ghana in 2009 inspired the need for the Central Bank to develop new guidelines to increase service growth.

However, the Central Bank, which is the regulator, in July 2015 released a new guidelines to replace the old Branchless Banking Guidelines called the Dedicated Electronic Money Issuers Guidelines i.e. DEMI Guidelines and Agent Guidelines.

Mrs. Kudowor noted that the Central Bank saw there were some limitations on the 2008 Branchless Banking Guideline such as challenges on the limited access points, roles and responsibilities among others were not clearly defined.

According to her, the Central Bank has recently engaged the major stakeholders such as the Telecos (MTN), partner banks, National Insurance Commission (NIC), Parliament, Consumer Protection Agency and others to review the guideline.

This exercise was agreed particularly that if we want to see some increase levels of service penetration and growth in line with the Kenya’s successes, there was need to change the model in Ghana.

Mrs. Kudowor of the BoG posited that the Central Bank has engaged the industry players on interoperability to reduce the dependency on PUS by integrating the systems involving the banks, mobile money operators and the merchants.

She added that there also risks involved as well as lack of system availability to check the potential abuses.

She noted that the BoG in 2012 joined the Africa Financial Inclusion (AFI) in order to lead the way for the financial inclusion in line with emerging trends.

According to her, the BoG is aimed at 70percent financial inclusion in Ghana by 2017.

In the regions of Ghana, it is noted that the banking penetration which is 36percent is higher in the sub-regions however, our mobile money penetration is 20percent which is very low compared to Kenya’s 75percent growth rate.

Mr. Eli Hini, General Manager, MTN Mobile Money Limited reiterated that MTN is ready to pay the interests on MTN mobile money accounts of its customers when given the green light by the Central Bank.

He noted that the formula for calculating is 1^1/2 to 7 percent per annum irrespective of the amount and shall be paid quarterly to active MTN MoMo account holders.

Mr. Eli Hini added that his outfit (MTN) has issued sanction and measures to check potential abuses by displaying the rates of service charge fees, introduced a short code for customers to reach their team to report issues of fraud and unapproved service charge fees.

He noted that all over the world the service has tend to thrive on innovations that provides a wide range of products and services drive adoption and patronage.

According to him, this requires an enabling regulatory environment that promotes innovations and at the same time ensures the right balance of controls are in place to ensure industry best practices are maintained.

He intimated that an enabling policy and regulatory framework creates an open and level playing field that fosters competition and innovation, leverages the value proposition of both banks and non-bank providers, attracts investments and allows providers to focus on refining operations and promoting customer adoption.

Mr. Hini indicated that the benefits that are derived from the MoMo service includes promotes financial inclusion as a driver because people who ordinarily will not have gave access to the formal financial sector are now actively using the service.

He added that it increases financial integrity in the sense that the risks of using mobile money to finance terrorism or launder money is very low due to the nature of the mobile channel and devices which tracks all transactions that are made contrary to cash based transactions.

“Also, it enhances consumer protection because mobile money is cheaper, secure and more convenient and reliable option to provide financial services to the consumer, more than any alternatives in the informal economy,” he emphasized.

Mr. Eli Hini added that it reduces the cost and risk of cash which creates excessive risk to the holder.

The Managing Director of Access Bank, Mr. Dolapo Ogundimu noted that banks and other partners must offer mobile money as default service to grow the subscriber base.

He indicated that the major stakeholders must increase the utilization and activation of the wallet as the only means of payment through initiatives to incentivize mobile money subscribers to drive growth.

According to him, there must be efforts to increase the accessibility of E-money because of the major concerns that agents and banks operates within a limited time of the day.

He added that the operators can also issue out mobile money scratch cards so that consumers may have the option to either load it onto their account or wallets.

Mr. Ogundimu noted the stakeholders must increase the momentum of developing a National Cashless Strategic Plan to define Cashless Ghana and the tools to drive the service within a short time.

The Country Manager of the Consultative Group to Assist the Poor (CGAP), Kenya, Miss Buddy Buruku said the Ministry of Finance in collaboration with the Central Bank is developing a Cashlite System to increase the reliability and effectiveness of the service.

She said despite 16.4 million mobile money subscribers, there are still gaps between registration and activeness.

According to her, Ghana lacks a direct policy which requires a strong implementation to give consumers the enjoyment mobile money seeks to offer.

She pointed out that Kenya has the highest penetration because the market was free and easy to operate and to develop as a new model whiles regulations picked up.

According to her, data released from the Central Bank of Kenya reveals that banking and mobile money penetration is tracking together in the neighborhood of 70percent but the banking penetration increased just by 2percent recently.

Search reveals that there are 24 mobile money service providers across the EAC, all of which were launched following the success of Safaricom’s M-Pesa — launched in Kenya in March 2007.

Kenya has 25.4 million mobile money subscribers who transact on six main platforms — Safaricom’s M-Pesa, Airtel Money, yuCash, Orange Money, MobiKash and Tangaza Pesa — backed by a network of more than 127,000 agents, according to the latest data from the Central Bank of Kenya.