AFRICA: INFRASTRUCTURE
AHEAD OF THE Q
Ghana Interbank Payment and Settlement Systems has been working to put the country on a cash-lite footing since 2007. And the launch of Africa’s first national QR code payment scheme could finally deliver the digital prize, says Kwadwo Ntim Significant changes are afoot in the Ghana payments space, as the country transitions from a cash-dependent economy to a digital one. At least, that is how it’s been presented over the last 12 months, as the world’s media was drawn to Africa’s experience of the pandemic. In truth, these changes had been afoot since 2007, when Ghana slipped under the radar as the first country in the world to introduce a fingerprint-enabled smart card linked to the country’s national switch scheme – in effect, a biometric banking system. More than three million Ghanaians (a sixth of the adult population) hold what are known as E-zwich cards, the technology provided by South Africa’s Net1 UEPS as an alternative to the Europay, Mastercard and Visa (EMV) standard. The E-zwich card can be used by customers across Ghana, particularly the unbanked and underbanked, and often in rural communities without the communication infrastructure cardholders typically rely on in the West.
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Tasked with enabling this vision of a ‘cash-lite’ Ghana with a standardised and regulated payments infrastructure, was GhIPSS (Ghana Interbank Payment and Settlement Systems), a subsidiary of Bank of Ghana. It was setup by the central bank with a mandate to implement and manage Ghana’s biometric card-based payment system, move banks to an automated clearing house and operate the national payment switch. When given its ‘to-do list’ in 2007, even the processing of cheques was still in ‘semi-manual mode’, as Kwadwo Ntim, general manager for technology and operations at GhIPSS, recalls. “A few of its components had been automated, but people were required to physically transport cheques into a central location, exchange them for processing, go back to their offices with reports on the results of the processing and then make a decision whether to pay. Not only was the process tedious, it was also inefficient,” he says. The biometric card was introduced in
2008, Ghanaians being invited to register for them through their banks, recording their fingerprints, including an ‘alarm digit‘, for cards that could be used with point-ofsale (PoS) machines and ATMs equipped with fingerprint recognition pads. That was followed by the national clearing system in 2009, and the deployment of the national switch infrastructure in 2011, binding what was a fragmented payments industry into a harmonious whole. Implementing the national switch infrastructure was a major undertaking. “All the participants within the space, which were mainly banks then, were running their own payment systems infrastructures, of sorts. So, the thinking in 2007 was to have a harmonised system that was integrated, would allow for the sharing of costs, and encourage all parties to work to a level that brought efficiencies to everyone,” says Ntim. Today, the payments landscape is looking rather fragmented again, given the subsequent evolution of technology, including mobile technology and e-money providers, in particular. “Financial technology companies started out by providing technology solutions to finance houses, but in the process have tried to take advantage of the opportunities within the space to operate in a quasi-financial service company structure, up to now,” says Ntim. “More importantly for us, the internet has become the cheapest source of communication to facilitate the interaction between a customer and a processor, which is what results in the interoperability service we are trying to achieve.
Unpacking the potential: Ghana is the first African state to harmonise QR code payment systems at a national level
Issue 8 | ThePaytechMagazine
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