The need for transaction truncation will decrease, according to panelists at this year’s “The Money Summit (TMS) 2023”, therefore there won’t be any “mobile money agents” in the near future.
They contend that the availability of needs has been facilitated by the digital world, particularly in the financial industry.
Discussing the topic ‘From competition to collaboration: how fintech is shaping the future finance’, the Chief Executive Officer-Ghana Association of Banks (GAB), John Awuah said “in the future, there would be nothing called Mobile money agents because there will be less of transaction truncation needs; transaction and supply of money or the velocity of money will move seamlessly. So, there would not be a point where you should cash out. Because when the money hits your account, you will transact using the same mechanism to improve on the velocity of money.”
Already, enhanced payment and settlement platforms – led by mobile money – have recorded remarkable growth over the last decade; driving up financial inclusion, especially for women, in the process.
Mr Awuah added that “The future we should all anticipate where we would not at any point be looking for where ‘can I go and withdraw that money’. Because when we withdraw the money, we transact; there will be avenues to make those transactions possible within the digital arena.”
Fintech has cemented its position as a critical component in the financial inclusion agenda and is poised to play a super-sized role in domestic and continental economic transformation.
Chief Digital & Marketing Officer-GCB Bank, Eric Coffie said the digital world has become a medium to make supply of needs easier especially in the financial sector.
“The development of FinTech is the next frontier in the future of banking. There are a few lapses that should be attended to with banking and transaction but if those are solved, banking and transaction in the digital space is the way forward from there.”
On his part, head of Retail Banking-FBN Bank Ghana, Allen Quaye revealed that future of banking in Africa is going to bring about a lot of competition.
“Non-banking Agencies and institutions will begin to render financial services to their customers, aiming to diversify and get more income from the banking or financing sector and further adds that principles should be put in place to make sure institutions in the financial sector go on the right path or else they would not be able to keep up with the revolution in the near future.”
In 2022, the West African region, led by Ghana, exceeded the market pioneers in East Africa and rest of the world in terms of its proportion of registered mobile money accounts. Its global share rose from 11 percent in 2021 to 33 percent by end of the year. The region’s 290 million registered accounts contributed US$277billion in transactions.
Domestically, last year the mobile money segment recorded a cumulative transaction value exceeding GH¢1trillion for the first time – confirming its position as the digital finance segment leader.
Although there was a decline from GH¢90.5billion in March to a low of GH¢77.4billion and GH¢77.2billion in June and July respectively, due to enforcement of the E-levy, recovery began in August. In December, the segment recorded GH¢112billion – a 47.2 percent increase over the GH¢82.9billion recorded in December 2021.
This significantly outperformed cheque transactions, which amounted to approximately a quarter of mobile money transactions at GH¢254.4billion. Meanwhile, Internet banking transactions were worth GH¢80.3billion.
Other digital payment platforms such as E-zwich, Gh-link and Ghipss Instant Pay (GIP) recorded transaction values of GH¢14.64billion, GH¢551.3million and GH¢58.7billion respectively.
This has coincided with a significant increase in capital raised by fintech startups in Africa, which has been described as a testament to the growing importance of digital financial services on the continent. The digital financial industry has demonstrated steady growth since 2016 in terms of transaction volume and financing, led mostly by the Big Five of Nigeria, South Africa, Rwanda, Kenya and Egypt, with Ghana historically coming in sixth position.
However, last year the Ghanaian fintechs saw deals worth over US$400 million across 47 deals. This was almost eight times higher than the country achieved in 2021, resulting in it being ranked fifth in funding raised on the African continent.
However, unicorn status – a US$1billion valuation – continues to elude Ghanaian fintechs; but there is a growing consensus that increased partnerships with banks could see this remedied in the short- to medium-term.
