The Chief Operating Officer (COO) of eTranzact, a payment aggregator in the country, Mr George Babafemi, has called on the government to introduce a policy that will discourage the use of cash payments and encourage electronic payments.
The policy, he said must state that, there would be a charge on cash withdrawals or deposits and also the usage of bullion van to transport money, among other physical cash payment activities to ensure that the country derives the full benefits of a cashless economy.
Speaking to GRAPHIC BUSINESS in an interview in Accra, Mr Babafemi said the policy must also ensure that incentives were introduced on electronic payment usage.
“The country requires clear policies that would allow the players to follow a structured advance towards achieving the full benefits of a cashless economy, including a national policy that encourages more electronic-based transactions”, he said.
A cashless economy is one in which the purchase of goods and services and the payment of debts and remittances are done through electronic money, either through credit and debit cards, direct transfers from one account to another, smart cards, mobile payment systems, and other technologies.
Centuries ago, the world began a cashless society based mainly on exchange, gift economics and debt, and then evolved to the use of money.
Electronic payment has enormous benefits
He noted that if the government wanted to reduce the usage of physical cash in the country, the way forward was to embrace the electronic payment system, adding that a cashless society would be of enormous benefit to Ghana.
According to him, apart from increased efficiency in making payments, a cashless economy would enhance better information on payment transactions for policy-making and attract more people into the formal banking sector.
He said the introduction of such a system would go a long way to reduce the number of ghost names on the government payroll and encouraged staff that were paid through the government pocket to register with the electronic switching (e-zwich) smart card systems for the payment of their salary.
“This should form part of the government’s efforts to improve on the management of public sector and also help reduce the cost involved in dealing with money,” he added.
Explaining further, the COO said cashless economy also results in the reduction in the risks associated with transporting currency notes, both for banks and individual robbery, loss from fire or flood, among other things.
It is estimated that four in every 10 Ghanaians carry cash, which is riskier; six in 10 during travel and one in every 10 Ghanaians using informal services had their money stolen.
It helps to formalize informal transactions and because it is a transparent process it helps combat crime and corruption while helping with record-keeping to reduce room for tax avoidance.
“Neighbouring Nigeria set an example when the Central Bank instituted a cashless economy policy to, among other things, drive development and modernization of Nigeria’s payment system in line with the country’s vision 2020 goal of being among the top 20 economies by the year 2020”, he stated.
“We believe a policy that prescribes a structured approach is a step in the right direction to a well-thought-out, properly sequenced cashless economy implementation,” he added.