mobile money interoperability

The Vice President of Ghana, Dr Mahamudu Bawumia on Wednesday, August 19, 2020, while addressing the New Patriotic Party’s (NPP) third town hall meeting and results fair in Accra, made a number of claims regarding mobile money interoperability and the gains made with its introduction.

Among other things, Dr Bawumia said Ghana has become the fastest growing mobile money market in Africa owing to the operationalization of mobile money interoperability and that, 15 million people in the country have mobile money accounts as a result.

“Thanks to mobile money interoperability, Ghana is now the fastest growing mobile money market in Africa. Mobile money transactions now dwarf banking transactions. The total number of transactions recorded under mobile money as of December 2019 was 200 million whereas that of banks was 599,000 (just about 3% of the mobile money number). Over 15 million people have mobile money accounts in Ghana!” the Vice President said.

We fact-checked three claims from the above statements and report as follows:

Claim 1: “Thanks to mobile money interoperability, Ghana is now the fastest growing mobile money market in Africa.” – Dr Bawumia

Verdict: True

Mobile Money Interoperability is a service that allows direct and seamless transfer of funds from one mobile money wallet to another mobile money wallet across networks. It was launched in May 2018 by the Vice President Dr Bawumia in Accra.

According to the Ghana Interbank Payment and Settlement Systems Limited (GhIPSS) which manages the system, the interoperability platform was used 5.12 million times between January and March 2020, up from 1.1 million times reported in the first quarter of 2019.

A press release by the World Bank on June 14, 2019, indicates the interoperability system has ensured “growth in the number of financial access points over the past five years” despite the challenges in making the economy financially inclusive.

The World Bank in its 4^th edition of the Ghana Economic Update, the latest report, published on June 1, 2019, and related to the above observation, rated Ghana as being the fastest growing Mobile Money market in Africa.

“Mobile phone penetration has created opportunities for the expansion of financial services and increased the role of non-financial institutions as much as e-money issuers, positioning Ghana as the fastest growing mobile money market in Africa,” excerpts of the report reads.

Claim 2: Mobile money transactions now dwarf banking transactions

Verdict: True

The Bank of Ghana which regulates the banking sector in the country released a report on the country’s financial and economic performance for December 2019.

In the document, the data captured financial transactions for the period of December 2018 to December 2019.

The total number of mobile money transactions for December 2019, per the report, was 200 million with a value of GH¢ 32.8 billion.

The total number of cheques cleared for December 2019 was 599,000, as stated by the Vice President.

Other data in the document included ACH Debit which recorded 73,000 transactions while ACH credit transactions were 772,000 transactions.

The number of E-zwich transactions was also 982,000.

Per the data, we notice that the 599,000 figure quoted by the Vice President was specific to the number of cheques cleared.

In providing education on whether clearance of cheques alone represents the meaning of banking transactions, a banking consultant, Nana OtuoAcheampong said there were various types of banking transactions including clearance of cheques.

In reference to the claim, he indicated that ACH credit and ACH debit as reported in the Bank of Ghana’s statement “are banking transactions.”

“Unless in his speech he tried to differentiate between the types of banking transactions… Maybe he took the cheque clearing segment only but globally, it is not the only transaction that a bank can undertake.” Nana OtuoAcheampong explained.

On what the ACH credit and ACH debit system was, he said they were interbank transactions that had to do with the debiting one’s account and crediting another’s account upon the instruction of the payee.

“If I give instructions to my bank and ask them to make payment to you, I haven’t signed a cheque but through ACH, they are able to do the clearing,” he said.

However, we find that in whichever way we look at it, mobile money transactions dwarf banking transactions.

Claim 3: Over 15 million people have mobile money accounts in Ghana

Verdict: Insufficient evidence

This is not the first time the Vice President has made this claim. An opposition Member of Parliament for Ningo Prampram, Sam George, has much earlier publicly challenged it.

To look into this claim, we accessed the Bank of Ghana’s latest Summary of Economic and Financial Data; for May 2020.

In the report, we found information on the number of registered Mobile Money accounts as well as the number of active Mobile Money accounts from March 2019 to March 2020.

The data for both periods and the two categories are represented in the table below:

	March 2019	March 2020
Registered mobile money accounts	29.6 million	34.3 million
Active mobile money accounts	12.7 million	14.8 million

From the table above, we gather that Ghana’s Vice President was making reference to the number of active mobile money accounts, 14.8 million as of March 2020 (15 million approximately) in his speech.

Relying on data for the number of active mobile money accounts to make a case for the number of users may appear misleading, which is the position of Sam George in his argument.

Indeed, with the number of registered mobile money accounts far exceeding Ghana’s estimated population, it will only be reasonable to assume that some people in Ghana use more than one mobile phone or numbers and possibly have two or more active mobile money accounts.

According to the Ghana Telecommunications Chamber, the number of mobile voice subscriptions in Ghana is over 41 million. But this number far exceeds the country’s estimated population of 30.9 million which also makes a good case about some users having multiple accounts.

The above notwithstanding, it is important to note that getting the actual number of users will require a lot more work including mobile networks collaborating to de-duplicate their data.

This may not entirely solve the problem because according to Dr William Derban, the founder of the Forum for Financial Inclusion Africa, a critical mass such as persons who do have personal mobile money accounts but conduct MoMo transactions through merchants over the counter may still not be accounted for.

“People using mobile money is not the same as registered accounts [but] some people can use mobile money over the counter to receive money and are not counted by this definition,” he said.

“While the GSMA [Global System for Mobile Communications] is an authority in this, it could be that a country may have its own definition that they use,” he added.

However, Dr Derban, while focusing on financial inclusion, said “[it] is more than just access to accounts (bank or mobile). It is more about the number of people who use it and most importantly, how they can use financial services to improve their lives. Can they save, can they borrow, do people have the right level of financial and digital skills to make informed decisions about their finances? Are they protected? These are areas that we need to look into carefully to ensure that the growth in access to finance via mobile money has the maximum impact on our people.”

While it appears most appropriate to make reference to mobile money accounts rather than mobile money users, industry players sometimes use both interchangeably, owing to the complexity involved in deriving the exact number of mobile money users in most populations.

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The reporter, produced this fact-check under the auspices of the Dubawa 2020 Fellowship in partnership with Citinewsroom to facilitate the ethos of “truth” in journalism and to enhance media literacy in the country.

During a one-on-one interview on Peace Fm’s Kokrooko on August 25th, 2020 between 54:56 to 55:06 minutes into the interview, the Vice President, Mahamadu Bawumia, made some claims about mobile money interoperability in Ghana and Africa as a whole.

The Vice president stated emphatically that,

“But the other part of it is that you have made the bank account and the mobile money wallet interoperable. So you can move money between the bank account and the mobile money wallet and vice versa and you can also do the same with the E-Zwich account. So triangular interoperability is what we have done. And Kwame this is the first country in Africa to do so. There is no other country in Africa that has been able to deliver mobile money interoperability.”

During the interview, viewers and listeners contested the statement citing Kenya as a country that had also adopted mobile money interoperability.

A video of the interview has been uploaded on Youtube.

We look at the two claims made by Bawaumia: first, “there is no other country in Africa that has been able to deliver mobile money interoperability” and second, that Ghana is the only country in Africa to implement interoperability between bank account and mobile money wallets.

What is mobile money operability?

This is a service that allows direct and seamless transfer of money from one mobile money wallet to another across networks.

Over time, this has grown to include integration in broader payment infrastructures, connecting a variety of financial services providers.

In this regard, there is a move from restricted transactions between just mobile money providers (MMPs) and one that offers the added opportunity for transfers or transactions between  two accounts, like MMPs and a bank.

According to the report published by GSMA, 

“Of the 95 markets where mobile money services are live, 48 have interoperability with either a bank or MMPs…On average, mobile money providers with bank integrations are connected to 13 banks.”

Claim 1: No country in Africa has been able to deliver mobile money interoperability.

Verdict: Ghana is not the only country to adopt and deliver on money interoperability. 

Dubawa ran an online check for African countries who have functioning mobile money interoperability and found that many African countries, for instance, Kenya, Uganda, Tanzania and others have adopted and implemented the mobile money interoperability. 

Quartz Africa in 2018 reported Tanzania to be the leading country in delivering interoperability. However, this level of operability is limited to Mobile money providers.

“Indeed, there’s precedent in Tanzania, the first African country to adopt interoperability, where there has been increased transactions among users. It’s a measure that’s also been adopted in Kenya and Ghana,” the report reads.

On June 4th, 2014, The East African also published a report on Tanzania being the first African country to implement the interoperability system. 

Further search also led to GSM Association, an organisation that represents the interest of mobile network operators worldwide.

GSMA released a report titled “Tracking the journey towards mobile money interoperability Emerging evidence from six markets: Tanzania, Pakistan, Madagascar, Ghana, Jordan and Uganda” in June 2020.

The report was based on  a study using a mixed-method analysis  which included 32 key informant interviews, both remote and in-country, as well as desk research and field interviews conducted between December 2019 and February 2020. 

It provides detailed insight into the state of mobile money operability in the selected countries and some limited information on others. See below.

Claim 2: “There is no interoperability between bank account and the mobile money wallet anywhere in Africa…”

Verdict: Other countries, Tanzania for instance, have mobile money wallet to bank account  interoperability which has been and is currently in use.

Dr Bawumia in responding to the host’s comment that other countries, including Kenya, have implemented interoperability said Ghana is the only African country to implement interoperability with banks inclusive (1:38:30 to 1:39:48).

This claim is false. Dubawa found information available that points to the fact that other African countries, for instance Tanzania, have mobile money wallet to bank account transfer services available. 

Tanzania has platforms that link and allow funds transfer from mobile wallet to bank accounts and even to wallets and accounts outside their country. In some cases, aggregators serve as a link between these accounts. Selcom, Craftsilicon or Cellantis are examples of such platforms that enable such transfers.

Dubawa further spoke to Victor Makere, Head of Digital Banking, Standard Chartered Bank, Tanzania, who explained that indeed mobile money wallet to bank account transfers are done in Tanzania in two ways. 

The first way (Direct Integration between Mobile Network Operator and Bank) requires the bank to have a wallet with the mobile network provider. The second option is similar but between the bank account  and MNO there is an aggregator.”

This was corroborated in another conversation with Emmanuel Mwinuka, Chief Information Officer (CIO), Absa Tanzania. He explained that mobile money wallet to bank account interoperability is functional in Tanzania. 

He further indicated that there is a plan to launch a project called “Tanzania Instant Payment System (TIPS)” which will create a platform that supports instant centralised settlement between MNOs and bank accounts, bank accounts and MNOs and MNOs to other MNOs. This project will eventually fade out the existing interoperability systems that are in place, promoting ease. 

Based only on the statement made by the vice president, this claim is false.

Conclusion

Ghana is not the first or only country to deliver on mobile money interoperability. It is also not the only African country to implement triangular interoperability.