09.07.2020 Opinion

Is Ghana Becoming A Cashless Society?

By Edmund Obeng Amaning & Justice Ohemeng-Boakye
Justice Ohemeng-BoakyeJustice Ohemeng-Boakye
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Globally, countries are experiencing a rapid expansion of digitization and technological advancements that touch on nearly all aspects of life. In general, the surge in digitization has improved operational efficiency and service delivery in all the key sectors of public and commercial importance, from manufacturing and industry, to business and commercial operations, agriculture, health, education, and finance.

Where the debate does exist, it highlights the growing tension between an evolving consumer payments landscape, a desire for increased business efficiency, and a growing concern that unbanked and underbanked consumers may be marginalized in a cashless economy. Only few countries around the world can boast of being a cashless state although several nations are making moves to eliminate cash in the system. Notable among countries which are said to be cashless societies is Sweden. For instance, in Sweden, it is common to see signs that say "No cash accepted" in shops.

Ghana is one of such countries that are making efforts to become a cashless society across the West African sub region. In furtherance to this effort, the Vice President of Ghana has hinted of steps being taken by the government to push towards a cashless economy. Among them was the launch of the National Interoperability platform and introduction of a universal QR code payment system in a bid towards a cashless society in Ghana.

But does this mean we’re on the verge of a cashless revolution? To answer this question, we analyzed millions of payment transactions from Bank of Ghana database to determine just how close–or far– Ghana is from becoming a truly cashless society. Our findings suggest that the cashless trend is clear. The 2019 audited financial statements released by the banks affirm this assertion.

According to a report by Research and Markets, Ghana’s mobile money industry reached a transaction value of US$36.1billion in 2018 and is expected to reach a transaction value of US$204.3billion by 2024, growing at a CAGR of 32.5% during 2019-2024. If the numbers we are seeing from Bank of Ghana`s payments statistics are anything to go by, that balance on float may hit some GH¢3.9billion by 2020.

Mobile money is projected to be the catalyst to becoming a cash lite economy, together with additional electronic payment methods such as bank cards, POS as well as e-payments. Also, the total volume and value of transactions recorded on the interoperability system increased from 96,907 and GH¢8.31 million in May 2018 to 2,266,631 and GH¢212.89 million as at December 2018 respectively. The data on mobile money interoperability also increases in value from GH¢212milion in 2018 to GH¢217million in 2019.

The total volume of Ghana Inter-bank Settlement (GIS) transactions recorded an annual growth of 30.8 per cent to 1.22 million in 2018. A country diagnostic study in 2017 concluded that Ghana has made significant progress in building the foundation of an inclusive digital payments ecosystem.

Key players like Express Pay, Slyde Pay, IT Consortium, Emergent, Bit Land: Are just a few of those that have transformed and shaped financial services in collaboration with the mobile network operators (MNOs) and Banks in Ghana. Some fintech companies have acted as payment gateways, banking tech, blockchain, investment tech, mobile wallet and payroll management service providers.

Credit and Debit Card Usage in Ghana; our analysis shows that electronic payment methods witnessed GH¢70 million in credit card transactions and GH¢ 13.58 million in debit card transactions in 2016. The credit card boom has not yet reached Ghana. This is because credit card fraud is prevalent in Ghana, leading to what has until recently been a cash-based economy.

Ghanaians who are afraid that their card number will be reused fraudulently, or that they might be charged more than once by the same vendor, are apprehensive to adopt this common payment method, despite the switch to Master, Visa cards etc in recent years.

The number of E-Zwich card holders was 2,774,799 at the end of December 2018 which showed an increase of 17.4 per cent over the 2017 position. Furthermore, prepaid cards issued in 2018 increased to 216,592 from 86,017 in 2017. The increase in the number of prepaid cards was on account of new banks authorized by the Bank of Ghana to provide prepaid card services (Payment Systems Oversight Annual Report, 2018).

This behavioral shift can partially be attributed to marketing from credit card companies aimed at increasing usage of cards purchases, so people are increasingly comfortable using their credit cards for smaller transactions at places like drug stores, convenience stores and coffee shops.

Secondly, this trend isn’t limited to the financial sector. Transaction amount at which consumers prefer their cards to cash had informed banks rolled out a total of 7,356 POSs by the same date at various merchant points, mostly in the urban centers at the end of 2017. The rise of digital payments, which includes traditional debit and prepaid cards as well as mobile payments, has contributed to the steady shift in payment practices among consumers. As smartphone penetration and digital payments expand, so will cashless capabilities. For some businesses, a cashless business model is a strategic choice that provides clear benefits.

While much of the current narrative regarding a cashless society is focused on the downside, there are advantages for both business owners and consumers. The key is, understanding customer payment preferences. The cashless reversal trend is not unique to fuel service stations or even to small retail outlets. The fast-casual pizza and salad chain has made the decision to start accepting both cash and cashless to ensure that everyone could access their restaurants.

We predict that the tipping point will come as younger, tech-savvy generations integrate their own digital payment habits into their own businesses in the future. This, coupled with concerted efforts to build bridges across the banking and digital divides, will enable a big shift toward cashless.

But for now, in markets where the choice to go cashless is not limited by legislation, business owners and managers should look at their transaction data to determine which payments strategy will preserve the health of their business while catering to the unique needs of their customers. In today’s competitive and ever-changing restaurant and retail landscape, brick and mortar businesses need to ensure one simple thing: they never miss a sale.

The Upside to Going Cashless

Eliminating cash would speed up transaction times. Everything would be processed digitally. Slow processing times would be a thing of the past. Merchants could benefit from going cashless because they would not have to keep cash on hand. Thieves are less likely to target a store that does not have cash available, and merchants could cut down on security associated with cash protection. However, those security savings may be offsetted by increased cyber security measures that would likely be required from going cashless. Cost associated with handling paper money as well as storing and depositing is absent.

Drawbacks of Eliminating Cash

Despite the potential benefits of going cashless, the biggest drawback would be illiteracy rate. For Ghana to fully enjoy a cashless system and have it operate effectively and efficiently, there is the need for illiteracy rate to be reduced to the bare minimum, This is due to the fact that high illiteracy rate is a major impediment to the successful usage and conversion of cashless system.

Data breaches are another cause for concern in a cashless society. If all transactions are processed in a digital form, payment information becomes significantly more vulnerable. Merchants would have to increase security measures to combat these risks, and those costs could once again be passed to the consumer.

Unreliable network is another challenge facing the implementation of cashless system in Ghana. This will make it difficult to transact cashless activities, customers can not perform their online business and activities whiles institutions keep complaining of network failures in their operations. This means for a cashless system to fully operate these challenges need to be addressed quickly to yield the desired results.

The Verdict: Is a Cashless Society Good for Ghana?

While there are many perks to going cashless, World Bank report showed that 70% of Ghana’s households are unbanked and for that matter still carry cash. Not all Ghanaians have the means to eliminate cash. The reasons range from tipping to budget management to emergency funding, but the real reason may ultimately come down to familiarity. Cash is tangible, quantifiable, and reliable. If the Internet is down, the power goes out, or a system gets hacked, cash is there to cover the transaction. No matter how much we transition to digital and card-based payments, cash would seem to have a place in Ghana for the foreseeable future. Therefore, Cash is King.


Firstly, SMEs preferred cash payments to electronic payment because they perceive that transactional fees make it expensive. Businesses push any extra cost incurred to the final consumer which means that SMEs would either prefer traditional cash system or pass the cost on to the consumer that would not favour government policy. It is therefore recommended that government should engage Banks and telecommunications companies to find possible ways to eliminate these charges. For instance government could provide incentives in the form of tax reliefs.

Secondly, High illiteracy rate and Identity theft were challenges within the banking industry. Recently, Government introduced Free SHS which seeks to improve the literacy rate in the country. While this effort is commendable, it is recommended that government should partner with the Banks to invest more in technological education, using the media as a platform where those who lack basic knowledge can learn how to use smartphones and other gadgets and also provide guidance on how to transact safely without losing personal information to scammers.

It also recommends that the government should join forces with stakeholders within the economy to invest heavily in cybersecurity as well as providing reliable networks by the Telcos because these challenges are facing the implementation of cashless system in Ghana.


Edmund Obeng Amaning is a researcher/consultant and holds a Master’s degree in Economics. His research interest includes Finance and Monetary Economics, Public finance, and Energy. Contact: [email protected] , Cell: +233 54 347 5499

Justice Ohemeng-Boakye is a banker with a strong knowledge in Clients and E-banking services. He is a researcher and holds a Master’s degree in Economics. Contact: [email protected]

Cell: +233 24 519 2745.

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