The Head of Payment Systems Department at the Bank of Ghana, Dr. Settor Amediku, has announced an extension to the deadline for payment service providers to meet the central bank’s minimum capital requirement.
The central bank had initially given Mobile Money Operators a June 2020 deadline to meet the new minimum capital requirement of GH¢20 million, but this has been extended to December 2020.
Dr. Amediku, who was speaking at the inaugural edition of the Mobile Technology for Development Conference in Accra, organised by the Ghana Chamber of Telecoms and the Financial Inclusion Forum Africa, disclosed that the central bank has also agreed to allow financial technology firms to convert 50 percent of their verifiable assets to cover 50 percent of their minimum capital requirements.
The central bank last year raised the minimum capital requirements for payment service providers from GH¢5 million to GH¢20 million.
Justifying the decision, the central bank said, “The emergence of new payment streams, institutions such as financial technology companies and the general acceptance of electronic money have necessitated the enactment of the Payment Systems and Services Act, 2019 (Act 987) to provide the legal and regulatory framework for the orderly development of the payment system.”
A release issued by the bank further noted that: “To operationalize Act 987, the Bank of Ghana hereby provides the minimum capital requirements, permissible activities and fees for all categories of payment service providers and financial technology companies.”
According to the Payment Systems and Services Act, 2019 (Act 987), all mobile money operators need to set up a subsidiary and will have to seek approval from the Bank of Ghana.
The BoG in the statement grouped the various licences under the Payment System Providers (PSP) into five – PSP Electronic Money Issuer – GH¢20 million, PSP Scheme (Payments cards like Visa and MasterCards) – GH¢8 million, PSP Enhanced Licence (Payment Platforms like ExpressPay etc) – GH¢2 million, PSP Medium Licence (Sub agents for the payment platforms) – GH¢ 800, 000 and Standard Licence (startups fintechs.) – No capital required.
Ghana going cash-lite
The Bank of Ghana has set 2024 as a deadline for the country to move towards an era where little cash is used in financial transactions.
The move is part of efforts to reduce the cost of doing business and improve revenue collections in the country.
The government has said it would start electronic payments for its services from June this year. This has been influenced by mobile number interoperability.
A 2016 Bank of Ghana Report revealed that the use of physical cash as the medium of exchange was on a continuous decline due to the increase in the use of other sources of payment, including cards, mobile money and the Ghana Interbank Payment and Settlement Systems (GhIPSS) Instant Pay.