Ghana has overhauled regulations to enable mobile money services. Nicholas Seun Adatsi/Bloomberg When Kodjo Adovor, CEO of Kevi Capital in Accra, needs some business cards, he sends his order and a mobile money payment and within an hour has motorcycle delivery of the cards.
A few years ago, Adovor says, he would have had to endure the traffic driving across Accra to pay cash. “Mobile money is facilitating business and that will increase as more and more people use digital platforms,” he says.
Backed by a supportive regulatory environment, mobile money has become the preferred payment method for Ghana’s small businesses.
According to the World Bank, Ghana is the fastest-growing mobile-money market in Africa . Mobile operators MTN, AirtelTigo and Vodafone currently lead the industry. Banks are pushing digital banking in Ghana, but with less success, according to a report from Tellimer in September. Banks such as Ecobank, Fidelity, Zenith and Standard Chartered can use Ghana’s improving digital infrastructure to widen inclusion, Tellimer says.
But the firms points to downside for banks through possible loss of deposits and lower margins on digital products due to the competition.
Mobile money may lead to the “cannibalisation” of some banking products, Tellimer says. “Banks will have to fight for transactions and deposits.”
MTN is the dominant player with about 90% of mobile money transactions . The company, Adovor says, has “a good network of agents who facilitate the transfers – the banks haven’t figured out how to do this yet because they are probably more comfortable with bricks and mortar transactions.” It will take other players a “lot of marketing and effort or very innovative strategies” to compete with MTN, Adovor argues.
Barrier to entry
“Most users of the technology have lost faith in banks and would rather keep their monies in their mobile wallet,” says Sheila Azuntaba, CEO at Innovative Microfinance in Accra. This will eventually make it difficult for banks to raise deposits, she says. Top 500 african companies 2018
A glimmer of hope
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