Digital Financial Inclusion and Security: The Regulation of Mobile Money in Ghana

The Cybersecurity, Capacity Development, and Financial Inclusion project, or CyberFI, brings together a robust, transparent community of practitioners and researchers working on digital financial inclusion. This series focuses on understanding financial inclusion ecosystems on their own terms—what countries are doing, what is working, and what isn’t. Six country case studies help capture the diversity of financial markets on the African continent: South Africa, NigeriaCameroon, Ghana, Uganda, and Zimbabwe.

Introduction

Ghana’s economy, like many others, is still recovering from the impact of the coronavirus pandemic.1 Despite this, the mobile money industry in Ghana enjoyed a big boost during the pandemic. In 2018, Ghana launched one of the first interoperable systems in Africa, which allows transactions between different telecom service providers in Ghana; reports reveal that the interoperability-supported payments reached 308 million Ghanaian cedis (GH₵) ($57 million) by 2019.2 Since then, mobile money has risen to become the most popular digital financial service (DFS) in Ghana, and in recent years, Ghana has been identified as one of the biggest mobile money markets and the fastest-growing one in Africa.3 The Bank of Ghana reported in 2021 that mobile money accounts, which numbered 32.7 million in February 2020, grew to number 40.9 million by February 2021.4 Mobile money service provides users with electronic accounts linked to their phone numbers from which they can store, send, and receive money.5 The simplicity of this service coupled with the convenience it offers has made it an ideal DFS solution for many Ghanaians, but there are also many challenges—including cyber crime, the need for infrastructure and digital capacity, and government policies such as the new Electronic Transactions Levy (or “e-levy”) and digital ID systems—that have inhibited digital financial inclusion (DFI).6 This paper discusses the state of DFI in Ghana and the regulatory framework for DFS, with particular attention paid to mobile money services as the major DFS player in the country and to the government’s digital security strategies in relation to DFS.

The Digital Financial Landscape in Ghana

The emergence of digital financial services and inclusion in Ghana arguably began when the Ghana Interbank Payment and Settlement Systems Limited (GhIPSS) was established in 2007.7 As a foundation for financial inclusion, GhIPSS, which is an interbank payment and settlement company, was tasked with creating and managing interoperable payment system infrastructure for banks and other financial institutions.8 Essentially, it was created to provide the technology to help Ghana become a cashless society.

Nnenna Ifeanyi-Ajufo

Dr. Nnenna Ifeanyi-Ajufo is an associate professor of law and the head of law at Buckinghamshire New University (United Kingdom). She was previously a law lecturer at Lancaster University (Ghana), where she taught cyber crime.

In April 2008, GhIPSS rolled out a novel national switch and smart card payment system dubbed e-Zwich.9 E-Zwich is a biometric smart card connected to all financial institutions in Ghana that allows users to deposit, withdraw, and transfer money.10 The card was targeted at the unbanked in Ghana, who amounted to a staggering 80 percent of the country’s population at the time.11 Unlike opening a bank account, which required documentation like letters of employment, recommendation and guarantor letters, or proof of address in the form of water or electricity bills, e-Zwich simply requires a user’s fingerprints. E-Zwich cardholders benefit from high security standards through the biometric (fingerprint) client authentication system. Card users were not restricted to banking halls but could transact at any location that had an e-Zwich point of sale (POS) device. The POS devices were available in all banks, some shops, and e-Zwich merchant stalls. The introduction of the e-Zwich system promoted DFI and Ghana’s digital economy, but because of various challenges the e-Zwich began to suffer decline after it commenced operations.12 Some users and merchants began to experience failed transactions and other technological issues at the POS locations, leaving them unable to withdraw money or continue other transactions due to poor and unstable cellular networks on which transactions relied.13 Despite the difficulties with e-Zwich, GhIPSS has continued to play a crucial role for payment systems. All DFS providers in Ghana, from banks and telecom companies to fintech companies, are partnered with GhIPSS. The interoperability that GhIPSS introduced in 2018 made mobile money more seamless, convenient, and cost-effective across all networks.14

A notable catalyst to mobile money’s debut in Ghana was the Branchless Banking Guidelines issued by the Bank of Ghana in 2008 to encourage deposit-taking financial institutions (banks and non-banks) to pursue branchless banking.15 The guidelines were issued with the primary aim of promoting financial inclusion by extending core banking and financial services outside of banking halls to provide these services to the unbanked.16 The Branchless Banking Guidelines also acknowledged that to accomplish branchless banking, financial institutions would need the help of agents to distribute or retail the services offered. Telecommunication companies (telcos) were seen as potential agents, especially for mobile banking.17 The guidelines, however, made the point that the use of agents or third-party service providers did not remove the responsibility of banks to ensure that operating branchless banking does not compromise banking standards.18 Focused on the financial inclusion objective, the guidelines also established that the only permissible model to operate branchless banking was a “many to many model,” which prevents exclusive partnerships between financial institutions and agents.19

Although the potential role of telcos was considered in the guidelines, it was limited to that of agents for the financial institutions. It is evident that the Bank of Ghana hoped that financial institutions would pioneer the cause of DFI through branchless banking; instead, the telcos have championed the change and made significant contributions to DFI in Ghana, especially through the introduction and advancement of mobile money services. The good reception mobile money received in the Ghanaian market unarguably influenced the commencement of other digital financial services in the country.

Financial technology (fintech) is also a growing industry that is offering innovative financial services to Ghanaians. Zeepay Ghana Limited is currently Ghana’s most successful fintech company. Founded in 2014 and wholly Ghanaian-owned, Zeepay received its dedicated electronic money issuer license in 2020.20 Zeepay essentially provides a single wallet in which customers can receive payments via different digital channels like money remittance, bank transfer, and mobile money. Customers can also withdraw from Zeepay agents if they choose. Zeepay, operating in over twenty countries globally, has partnered with all three mobile money operators and some banks for flexible payments, remittances, and transfers, and it is a major DFS player in Ghana. Zeepay is also licensed by the Financial Conduct Authority of the United Kingdom.21 ExpressPay is another growing fintech player in Ghana that allows users to conveniently pay various types of bills online and to send monies instantly to any bank account, making the tedious process of bank-to-bank transfers much simpler.22 Launched in 2018, Bitsika is also creating a platform that uses digital currencies to move money across borders at low or zero cost. Users can deposit and remit money across multiple currencies using the Bitsika app. By using digital currencies and distributed ledger technology, Bitsika is making cross-border payments instant and auditable at negligible costs.23

The Growth of Mobile Money as the Leading DFS in Ghana

In compliance with the Branchless Banking Guidelines, MTN—Ghana’s largest telecommunications service provider—partnered with nine banks and launched mobile money services in July 2009.24 Under the guidelines, it only had the capacity to be an agent of the banks. All mobile money accounts opened with MTN were linked to one of these nine banks. MTN invested heavily in creating awareness of the service by sending merchants to the unbanked and underserved areas of the country to educate about and market mobile money.25 All the merchants who penetrated the unbanked geography of Ghana were from partner banks who had shown interest in those areas. Each mobile money account registered by a merchant represented an account of the bank the merchant worked for. Registering customers and opening accounts, however, presented another hurdle. Customers had to present a valid national ID to be registered, which was a hindrance to the registration process for many.26 Registrations had to be a scheduled event rather than a service that could be undertaken immediately once a customer expressed interest in the service.27 Despite this, some factors made mobile money accounts preferable to traditional bank accounts for the unbanked. They had lesser know-your-customer (KYC) requirements and were less expensive to use.28 Merchants were also more accessible to the unbanked, reaching some rural areas. By October 2009, MTN had about 20,000 registered mobile money subscribers.29 However, MTN could not operate mobile money at the scale and in the manner it wanted because a majority of the operational decisions were made by the partner banks.30

Upon reviewing the Branchless Banking Guidelines, the Bank of Ghana issued the Guidelines for E-Money Issuers and Agent Guidelines in 2015. These guidelines replaced the Branchless Banking Guidelines and set out new protocols for mobile money operations.31 According to the Bank of Ghana, the guidelines were issued as part of its broader strategy to create an enabling regulatory environment for efficient and safe digital payment and funds transfer mechanisms and to “promote the availability and acceptance of electronic money as a retail payment medium with the potential to increase financial inclusion.”32 The E-Money Issuer Guidelines introduced the status of Dedicated Electronic Money Issuer (DEMI), which an institution could obtain by getting a license to issue e-money alongside licensed financial institutions.33 This gave telcos an opportunity to gain the capacity to issue money to customers for transactions without linking each mobile money account to a bank account. The E-Money Issuer Guidelines set out standards of systems and controls as well as technology and security requirements DEMIs should use. It also set out general operational provisions for DEMIs, including types of mobile money accounts, transaction limits, permissible transactions, KYC requirements, capital and liquid fund requirements, and consumer protection principles, among others.34 Many of these requirements and operational rules have been incorporated into the Payment Systems Act 2019 (Act 987), which currently regulates digital financial service providers.

The Agent Guidelines essentially changed the meaning of “agent” from the meaning outlined in the Branchless Banking Guidelines and provided new operational guidelines to complement the new e-money guidelines and payment systems structure the Bank of Ghana was putting into place. The practical effect of the 2015 guidelines released the telcos from the position of agents and gave them the option to be principals in the relationship. Although telcos are no longer required to be agents of banks, beneficial partnerships still exist between telcos and some banks to facilitate transactions between mobile money accounts and bank accounts and payments for services.

MTN’s success in venturing into mobile money services and the enabling regulatory environment inspired the other mobile networks operators in Ghana to follow suit. Tigo Cash was launched in October 2010, Airtel Money in 2011, and Vodafone Cash in 2015.35 In 2017, Airtel and Tigo merged to create AirtelTigo, which also resulted in .36 By 2019, mobile phones officially became the most-used medium of payment in Ghana due to mobile money and mobile banking.37 Mobile money dominated the landscape with 32.5 million registered accounts (from 23.9 million in 2018) and 13 million active users at the end of 2018 (see figure 1).38

MTN Ghana has made the largest contribution to DFI in Ghana, not only by introducing mobile money but also by providing the largest amount of coverage. MTN Ghana also set up MobileMoney Limited, a subsidiary responsible for mobile financial services. With a market share of over 80 percent since 2017, MTN continues to dominate the mobile money market to date.39 The Ministry of Communications and Digitalisation (MOCD) revealed in 2020 that MTN controlled 75 percent of the telecom market, labeling it a significant market power (SMP).40 The MOCD also revealed that MTN controlled about 94 percent of the mobile money market share, because the other telcos pay interconnect fees to MTN.41 MTN’s SMP designation enables the National Communications Authority (NCA) to enforce the provisions of the Electronic Communications Act 2008, such as setting a price floor or ceiling for associated mobile money costs so as to maintain a competitive market and level the playing field for all telcos.

AirtelTigo, on the other hand, was the result of a merger to create a stronger telecommunications network. However, in 2020, the parent companies of the entity opted to sell their shares to the government.42 Since the sale was completed in November 2021, it remains to be seen whether operating under the government’s management will be to AirtelTigo’s detriment or success. The government’s previous failure to successfully manage the first government-owned telco, Ghana Telecom, resulted in the privatization of Ghana Telecom, which is now Vodafone Ghana. Vodafone Ghana has also made efforts to increase financial inclusion by allowing Vodafone Cash users to send and deposit money without any charges since 2020.43 This initiative was made possible due to mobile money interoperability.44 Vodafone became the first player in the industry to introduce a free peer-to-peer service to enhance commercial advantage and allow for more financial inclusion.

The Regulatory Environment

The Bank of Ghana has supervisory and regulatory authority over banks and all other financial institutions, and it oversees their licensing and operation through the various acts of parliament that relate to financial services. The Banking Supervision Department of the Bank of Ghana oversees banks while the Other Financial Institutions Supervision Department oversees financial institutions that are not banks. The Payments Systems Department oversees the financial activities and in particular the mobile money operations of telcos. That department also undertakes licensing, monitoring, and onboarding for telcos involved in payment systems.45 The Fintech and Innovations Office oversees payment and financial technology service providers. On the other hand, rather than being overseen by the Bank of Ghana, the telecommunication services provided by telcos are supervised and regulated by the NCA. The NCA regulates telcos by granting licenses for operation, ensuring fair competition among licensees, monitoring the quality of service, setting equipment standards, and mandating safeguard mechanisms.

To maintain control over the fast-developing financial sector, new and improved legislation has been passed to replace legislation that was determined unsuitable to the current financial services industry. For instance, the Payment Systems Act 2003 (Act 662) was replaced with the Payment Systems and Services Act 2019 (Act 987). These acts, along with the Non-Bank Financial Institution Act 2008 (Act 774), have vested the Bank of Ghana with powers to license, regulate, and supervise financial sector developments. Telcos that operate mobile money services are regarded as payment system providers under the Payment Systems Act (Act 987), meaning that their licensing and regulation fall to the Bank of Ghana.46 The Payment Systems Act is the legislation applicable to DFS or payment system services in Ghana. It consolidates the laws relating to payment systems and payment services and regulates institutions which operate payment services and electronic money business. Under the Payment Systems Act, it is a criminal offense to operate a payment service business without a payment service license from the Bank of Ghana.47

In 2016, Ghana also introduced the Banks and Specialised Deposit-Taking Institutions Act 2016 (Act 930), which regulates institutions that engage in deposit-taking business and consolidates laws relating to deposits. While banks and nonbank institutions engaged in deposit-taking business licensed under Act 930 are not required to obtain a license to operate a payment system, they must apply for and receive authorization from the Bank of Ghana to offer services.48

Besides Act 987, payment service providers (PSPs) are regulated by other legislation, such as the Data Protection Act 2012 (Act 843). Registering with the Data Protection Commission and obtaining a data protection certificate are prerequisites to applying for a PSP license (which in turn is a requirement for businesses to acquire licenses or registration to operate in Ghana). Applicants for a PSP license are additionally required to submit an anti–money laundering policy as part of their application, in accordance with the Anti-Money Laundering Act 2020 (Act 1044). The policy should outline their KYC processes, internal reporting procedures, and measures to ensure compliance with the act.

PSPs also submit a cybersecurity policy as part of their license application to the Bank of Ghana that must comply with the Cybersecurity Act 2020 (Act 1038). The submitted cybersecurity policy must detail key performance indicators or strategies that highlight cybersecurity consciousness. The Cybersecurity Act 2020 also established the Cyber Security Authority to regulate cybersecurity activities in Ghana. The board of the authority is constituted by the ministers of communication, defense, national security, and the interior. For good coordination in cybersecurity incidents, the authority is required to establish sectoral computer emergency response teams (CERTs), including for the banking and finance sector. Based on conversations with sector practitioners, one salient issue is a question of coordination among the sectoral CERTs and the main Cybersecurity Authority; however, the Ghana National Computer Emergency Response Team (CERT-GH), which was formed by the MOCD in August 2014 principally to respond to cyber infractions on government networks, also serves the private sector.49

Most of the legislation highlighted above were passed recently. The DFS sector in Ghana—despite being quite young—has immense potential and is developing quickly; hence, the Bank of Ghana and the government are updating legislation to match developments and ensure secure DFI. Importantly, the acts of parliament that regulate the various financial institutions provide consumer and individual-user protections; the enforcement of these protections is one of the many powers of the Bank of Ghana. Ultimately, the onus falls on the Bank of Ghana and other regulators and enforcement bodies like the Data Commission and the Cybersecurity Authority to ensure that PSPs are compliant with all relevant legislation and regulation.

Security in DFS in Ghana and Regulation of Mobile Money Operators

In 2017, the financial sector in Ghana underwent massive overhaul as banks and other financial institutions that were unlicensed or noncompliant were shut down by the Bank of Ghana.50 Many depositors of the collapsed institutions were heavily affected and were unable to recover their deposits and investments because of the institutions’ mismanagement.51 However, mobile money operations continued. As mobile money grew, fraud began to emerge in the sector. The Ghana Chamber of Telecommunications reported 278 mobile money–related fraud cases in 2015 and 388 cases in 2016.52 In April 2021, the chamber mentioned that over 4,000 cases of mobile money fraud were under investigation.53

Table 1 shows some types of mobile money fraud identified in Ghana.54









Types of Mobile Money Fraud in Ghana
TYPE OF FRAUD MEANING
1.     Mobile network operator fraud  This type of fraud involves employees of telcos and occurs in different forms. Employees can steal from customers’ mobile money wallets, transfer customers’ money unauthorized, collude with other fraudsters to swap SIM cards  , etc. It generally involves a telco employee manipulating a customer’s account without authorization.
2.     False promotion fraud Prompts are sent under the guise of a telco promotion and the recipient is asked to input their PIN as a verification measure to claim their “prize.” The fraudster gains access to the recipient’s mobile money account with the PIN that was inputted.
3.     Scam messages/reversal of erroneous transactions A fake SMS is sent that indicates a deposit into a customer’s account. The fraudster then calls the customer to tell them the deposit was a mistake and to send that amount back.
4.     Fortuitous scam Fraudsters pose as delivery companies and call customers under the pretext of delivering goods to them from relatives abroad. Customers will then be instructed to make a deposit to a mobile money account in exchange for delivering the goods.

By 2017, fraud was not an uncommon occurrence among MTN subscribers.55 It was reported that some MTN agents and staff were themselves accomplices to the fraud.56 Some of the few fraud cases police successfully solved involved the arrest of telco employees.57 Telcos in Ghana have been meticulous in ensuring employees or ex-employees who were caught defrauding or stealing from customers are not associated with them. Names of telecommunication companies are not typically disclosed in articles reporting mobile money fraud because financial institutions fear that they will lose customers when they expose their vulnerabilities.58 This also means that there is a culture of limited information-sharing; lack of reporting in turn causes lack of evidence to aid law enforcement in ensuring mitigation of further attacks. However, fraud cases are acknowledged publicly by the Ghana Chamber of Telecommunication, which is the umbrella association to which all mobile network operators belong.59

While many financial institutions are investing in their cyber defenses, unsecure, low-cost mobile and internet devices are still a major source of cyber threats to financial institutions.60 DFS providers are still undertaking diverse individualistic digital security efforts. For example, to curb fraud, MTN has made it mandatory for customers to display a national ID before transacting with any of its agents or merchants. This policy took effect in 2021 amid arguments that it could derail DFI because access to national IDs remains a challenge and that use of IDs for transactions would not help to curb fraud.61

DFS in Ghana Today: Complications Ahead for Inclusion and Security

The success of mobile money and other financial products offered by Zeepay, Express Pay, and Bitsika represents welcome progress in Ghana’s concerted effort toward DFI. In May 2020, the Ministry of Finance launched the world’s first Digital Financial Services Policy. The policy outlines a vision of DFI.62 Below are features the government aims to see in the Ghanaian digital finance space by 2023:

  • A holistic digital payment ecosystem for goods and services
  • Digitized pension payments for all
  • Digital payment channels maximized by financial services providers
  • Digitized records for citizens (including record creation, retrieval, and archiving)
  • Seamless connectivity between government and private institutions

To accomplish this, the government will work in six areas that it refers to as policy pillars. They are governance, enabling legislation, capacity building, market infrastructure, digital payment use cases, and supporting fintech. Notably, the cybersecurity of DFI is not mentioned either as an aim or a pillar. While it can be argued that cybersecurity in relation to DFI services is implied in the above pillars, the obvious noninclusion can also be interpreted as an omission or a nonprioritization.

Ghana’s Electronic Transactions Levy

A new development that raises the question of digital financial exclusion is the recent move by the government of Ghana in November 2021 to include in the reading of its 2022 budget a new tax: the e-levy.63 This tax applies a 1.75 percent levy on electronic transactions, which include inward remittances, bank transfers, merchant payments, and mobile money payments above GH₵100 (approximately $13) commencing February 1, 2022.64 This levy is separate from the fees that telcos already charge customers for transactions. Despite concerns that the e-levy will weaken Ghana’s financial system and slow down the development of e-commerce, the government argued that the e-levy was necessitated by a drive to “widen the tax net,” which would increase the country’s tax to GDP proportion from about 11.3 percent to over 16 percent and serve as a driving force for Ghana’s economy.65

News of the e-levy was immediately met with great outcry from the public, with panic withdrawals occurring a day after the announcement.66 To warm the public to the idea of the levy, a number of town hall meetings were held in different parts of the country.67 Initially, the Electronic Levy Bill 2021 did not pass Parliament,68 and public protests against it continued.69 Notwithstanding the protests and opposition, Ghana’s parliament approved the e-levy after members of parliament reintroduced the bill.70 The president thereafter signed the e-levy bill into law, effective May 1, 2022. An application for an injunction against the e-levy was dismissed by the Supreme Court of Ghana on May 4, 2022, meaning that the controversial e-levy is now in force. While the e-levy is not exclusive to mobile money, mobile money is the biggest and most clearly affected enterprise in the electronic transactions space. For every transaction from one mobile money wallet to any other recipient source, the sender pays an additional 1.75 percent in transaction fees as e-levy. Mobile money is also the reason the e-levy has gained so much media attention, since many Ghanaians increasingly rely on mobile money transactions as a primary means for conducting digital finance.

Objectively, the e-levy can hinder DFI. It has already created the unintended effect of generating not only panic but also user distrust and insecurity, as evidenced by the withdrawals and concerns that fraudsters running social engineering schemes will begin initiating a reversal of the e-levy on mobile money transactions.71 In rural areas especially, many people’s mobile money wallet is the closest thing they have to a bank account. It is the primary means by which they send and receive money. The e-levy will certainly discourage such people from sending taxable amounts and will reduce mobile money transactions and encourage people to use cash if there is no viable alternative.

Another reason for the pushback on the e-levy is the double taxation it will inadvertently introduce. For example, many employees are paid their salary via mobile money. Paying an additional levy for transactions with money that has been already taxed is burdensome to the average Ghanaian worker. Businesses use merchant mobile money accounts since transactions may involve large sums of money. For enterprises to pay a levy of 1.75 percent—in addition to the usual charges each time a payment above GH₵100 is made—may cause them to reduce transactions and seek a more cost-effective option, which may well be cash. However, the government has assured citizens that it is in talks with the telcos to ensure the combination of the levy and the transaction fees are not burdensome to the public. Regardless, doubts and worries about the levy are far from settled and will inadvertently impact financial inclusion in Ghana.

Cyber Incidents Reporting and Information Sharing

Another curiosity stems from the reporting of fraud incidents. There is a general underreporting of fraud incidents and a dearth of statistics, as highlighted above, as companies typically fear the loss of customers in the wake of disclosing such incidents. It is very common to leave customers to their fate when they report incidences of fraud, thereby passing the burden of security on to consumers and complicating the goal of DFI. Addressing the challenges of fraud was one of the reasons the NCA recently directed all Ghanaians to reregister their SIM cards by presenting their national IDs or Ghana Card to telcos.72 It remains to be seen if the SIM reregistration process will enhance the government’s strategy to police fraud in the financial services sector through filtering SIM cards used for fraudulent purposes.

Digital Identification Systems

Digital identification systems present a challenge for DFI in Ghana.73 Many services in Ghana are dependent on forms of identification that can be digitally verified or authenticated; however, this leaves many Ghanaians, especially those in the rural areas, financially excluded and unable to participate in available digital financial services. The government of Ghana introduced the Ghana Card to document national identity and mandated that from July 1, 2022, it would serve as the only ID document required for all financial transactions with institutions under the authority of the Bank of Ghana. To bolster digital identification, the government also required that all telcos use Ghana Cards to reregister all SIM cards; however, not all Ghanaians have registered for and acquired the Ghana Card.74 Public opinion suggests that the time allotted for the SIM reregistration exercise (October 2021 to March 2022) was overly short and that adequate measures were not put in place to facilitate mass registration while observing appropriate COVID-19 protocols. The National Identification Authority and the NCA have acknowledged that the backlog of unprinted cards, uncollected cards, and duplicate applications warrants a deadline extension.75 At the time of writing, no SIM cards have been deactivated and registration has not been officially ended.

New telco policies also direct that mobile money transactions require proof of identity for conducting transactions.76 Valid forms of ID include a driver’s license, voter ID, passport, Social Security and National Insurance Trust ID, National Health Insurance card, or Ghana Card (national ID). According to research, Ghanaians without formal ID tend to be the poor and those living in rural areas, where mobile money is their only access to financial services.77 Obtaining and replacing IDs in Ghana is also hampered by bureaucratic processes, which means that new digital ID policies could discourage customers from using mobile money. Linking SIM reregistration to the Ghana Card means that people will be unable to use mobile money services if SIM cards are indeed deactivated for failure to reregister. For enhanced ID policies to advance financial inclusion rather than retard or diminish it, the government must ensure that all Ghanaians are registered for and receive the Ghana Card. There can be no DFI without adequate and efficient identification systems. This will further facilitate interoperability, enabling people to make different payments in a secure manner through single transactions.

Conclusion

Four challenges continue to hamper digital financial inclusion in Ghana: capacity, skills, trust, and security. To ensure DFI benefits everyone, there is a need to provide more than just access; it is important to equip citizens with the capacity, skills, and trust to go online. Outlined below are areas for improvement within Ghana’s digital financial ecosystem.

  1. Increased cybersecurity enforcement within digital financial ecosystems to ensure resilience against digital technology–related risks: Cybersecurity is important to ensure DFI. However, the interface between cybersecurity and economic viability remains a complex policy challenge. Domestic policies and regulations on cybersecurity should be enforced while paying due consideration to issues like DFI; for example, the cybersecurity of DFI is not stated as one of the pillars of the trailblazing Ghanaian Digital Financial Services Policy. This is notwithstanding the continued increase in reports of fraudsters targeting mobile money accounts; along with the loss of funds and data, privacy, and security breaches, these incidents risk diminishing trust in digital financial services.78 Ghana’s digital financial policies ought to incorporate cybersecurity if they are to be effective in achieving their lofty goals.
  2. Advancing digital inclusion infrastructure: With the rapid expansion of mobile-phone banking in Africa helping to bring financial services to unbanked communities, development efforts to advance infrastructure that will enable the functioning of digital systems should be a priority. Factors such as access to internet and electricity are key success determinants for enhancing DFI. Many of Ghana’s financially excluded live in rural areas without access to internet, electricity, or systems that can function when offline, thereby compounding digital divides.
  3. Increasing digital capacity, skills, and trust: Since the onset of the coronavirus pandemic, digital technology has become, more than ever, a defining tool for the pursuit of work, business, and life across the continent, and importantly, for promoting financial inclusion. The meaningful use of mobile money services requires digital skills, literacy, accessibility, and trust in the digital ecosystem. Digital financial capability is vital to achieving wider policy outcomes such as improving employment, health, education, and economic growth; therefore, government must make DFI part of wider government policy and programs. Government must identify where increasing digital financial capability will improve policy outcomes and integrate it into relevant programs. While enhancing digital capability for citizens, it is important also to enhance cyber trust so that cyber risks will not be perceived to outweigh the benefits of being financially included. For example, since 2017, Ghana has observed National Cybersecurity Awareness Month as an annual event spearheaded by the National Cyber Security Centre of the MOCD to intensify capacity building and awareness creation efforts on cyber hygiene and cybersecurity in Ghana for the general public. Subsequent efforts can embed cross-government digital financial capability and skills programs as part of wider cybersecurity initiatives.
  4. Measuring DFI and security through data and research: It is important to agree on a common definition for DFI as well as the identifiers that signify DFI and capabilities. Measuring DFI and the security of services through data and research will provide opportunities for practically implementing and measuring success for the This will also allow government and DFI stakeholders to measure how secure DFI systems are, provide a basis to share best practices across DFI sectors, and further assist DFI providers to design services in a way that understands the capabilities of their service users and enhances security and trust in services.
  5. Improving collaboration and partnership: The key regulatory and security issues raised by DFI relate to consumer protection, regulation of digital money and payment systems, cyber fraud policing, anti–money laundering efforts, and measures to counter financing of terrorism.79 While the government continues to play a central role across a range of functions, including regulation, policymaking, and provision of digital infrastructure, effective directing of these issues will require multiple sectoral and stakeholder competencies, which necessitates effective partnership and collaboration.80 For example, activities across other sectors—such as sectoral computer emergency response efforts—should be aligned to government efforts. This will require the Bank of Ghana, the NCA, market regulators, and other relevant authorities to cooperate toward ensuring security of DFS. While Ghanaian financial institutions and telcos continue to collaborate and invest in their sectoral CERTs, Ghanaian authorities must establish clear legal and regulatory standards and guidelines to ensure the safety and security of DFS and further enhance security cooperation among sectoral CERTs. Public-private partnership is an imperative for cybersecurity initiatives according to Article 26 of the African Union Convention of Cyber Security and Personal Data Protection.81 Such partnership will further assist in identifying best practice initiatives. It is also important to create a support network to use expertise and resources to assist victims of digital financial fraud. The Bank of Ghana, along with the financial sector and telcos, must also link DFI and cybersecurity into its wider policy programs and make digital financial capacity building and security a core requirement for providers of financial services.

The growth of financial inclusion in Ghana has been mainly due to the development of DFS. Ghana’s DFS and DFI space continues to evolve with the entry of other players like fintech services, as well as the new DFS policy, which signaled that the government is focused on an agenda that will continue to ensure DFI. However, Ghana’s approach to ensuring DFI must leverage cross-sectoral partnerships and whole-of-government collaborations to improve security for DFS as Ghana continues to lead in the West African region by number of mobile money transactions—which represent 82 percent of the country’s GDP—and remains the fastest-growing mobile money market in Africa over the past five years.82 

About the Author

Dr. Nnenna Ifeanyi-Ajufo is an associate professor of law and the head of law at Buckinghamshire New University (United Kingdom). She was previously a law lecturer at Lancaster University (Ghana), where she taught cyber crime. She serves as the vice-chairperson of the African Union Cyber Security Experts Group and has been effectively involved in promoting the cybersecurity efforts of the African Union Commission and African member states. She is also a Technology and Human Rights Fellow at the Carr Center for Human Rights Policy at Harvard University (United States) for the 2022–2023 academic year and a member of the International Law Association Working Group on Digital Challenges for International Law. In March 2022, she was nominated by the United States Mission to the African Union to participate in the U.S. Department of State International Visitors Leadership Program on “Promoting Cybersecurity.” She was also appointed a mentor on the International Telecommunications Union’s Women in Cybersecurity Mentorship Programme 2022. She has written for a vast range of research projects, journals, and media publications and is also a contributing editor to Directions, an initiative of the EU Cyber Direct project of the European Union Institute for Security Studies.

Notes

1 “Digital Financial Inclusion,” World Bank, accessed October 4, 2021, https://www.worldbank.org/en/topic/financialinclusion/publication/digital-financial-inclusion.

2 Selin Ozyurt, “Ghana Is Now Fastest Growing Mobile Money Market in Africa,” Quartz Africa, last updated July 20, 2022, https://qz.com/africa/1662059/ghana-is-africas-fastest-growing-mobile-money-market.

3 Max Mattern, “How Ghana Became One of Africa’s Top Mobile Money Markets,” 2017 Global Findex: What You Need to Know (blog series), Consultative Group to Assist the Poor, June 21, 2018, https://www.cgap.org/blog/how-ghana-became-one-africas-top-mobile-money-markets.

4 Summary of Economic and Financial Data – September 2021,” Bank of Ghana, September 27, 2021, 11, https://www.bog.gov.gh/wp-content/uploads/2021/09/Summary-of-Economic-Financial-Data-September-2021-1.pdf.

5 “What Is Mobile Money? A Guide About Mobile Money from Worldremit,” WorldRemit, accessed October 21, 2021, https://www.worldremit.com/en/how-it-works-mobile-money.

6 Michael Tobias Geiger, Kwabena Gyan Kwakye, Carlos Leonardo Vicente, Barbara Monica Wiafe, and Nana Yaa Boakye Adjei, “Fourth Ghana Economic Update: Enhancing Financial Inclusion – Africa Region,” World Bank, June 1, 2019, http://documents.worldbank.org/curated/en/395721560318628665/Fourth-Ghana-Economic-Update-Enhancing-Financial-Inclusion-Africa-Region.

7 “Who We Are,” Ghana Interbank Payment and Settlement Systems Limited, accessed October 6, 2021, https://ghipss.net/index.php/about/who-we-are.

8 Ibid.

9 “E-Zwich Biometric Card,” Ghana Interbank Payment and Settlement Systems Limited, accessed September 14, 2021, https://ghipss.net/index.php/services/e-Zwich-biometric-card.

10 Ibid.

11 Kwadwo Boateng, “Ghana’s Progress on Reaching Out to the Unbanked Through Financial Inclusion,” International Journal of Management Studies 5, no. 2 (August 2018).

12 James T. Arthur, “Ghana’s E-Zwich System and the Characteristics of Innovation” (master’s thesis, Eastern Illinois University, 2015), 83–86, https://thekeep.eiu.edu/cgi/viewcontent.cgi?article=3356&context=theses.

13 Ibid.

14 “Ghana’s First Mobile Money Interoperability System Deepens Financial Inclusion and Promotes Cashless Agenda,” Alliance for Financial Inclusion, accessed November 13, 2021, https://www.afi-global.org/newsroom/news/ghanas-first-mobile-money-interoperability-system-deepens-financial-inclusion-and-promotes-cashless-agenda.

15 “Notice to Banks and Savings and Loans Companies: Guidelines to Branchless Banking,” Bank of Ghana, accessed August 10, 2022, https://dfsobservatory.com/sites/default/files/Bank%20of%20Ghana%20-%20Notice%20No%20BG-GOV-SEC-2008-21%20-%20Regulatory%20Framework%20for%20Branchless%20Banking.pdf.

16 Ibid., 1–8.

17 Ibid., 2.

18 Ibid., 1–8.

19 Ibid., 3.

20 “About Us,” Zeepay, accessed January 6, 2022, https://www.myzeepay.com/about-us; Bank of Ghana, “Bank of Ghana Licenses First Fintech,” news release, April 30, 2020, https://www.bog.gov.gh/wp-content/uploads/2020/04/Press-Release-Bank-of-Ghana-licenses-First-Fintech.pdf.

21 Ibid.

22 “Who We Are – Take A Look,” ExpressPay, accessed January 10, 2022, https://expresspaygh.com/aboutus.php.

23 Jeffrey Gogo, “Ghanaian Startup Bitsika Africa Processed $40 Million in Crypto Remittances in 2020, Up 3,900% Year-on-Year,” Bitcoin.com, January 4, 2021, https://news.bitcoin.com/ghanaian-startup-bitsika-africa-processed-40-million-in-crypto-remittances-in-2020-up-3900-year-on-year.

24 “MTN Mobile Money – Spotlight on Ghana,” GSMA, October 21, 2009, https://www.gsma.com/mobilefordevelopment/country/ghana/mtn-mobile-money-spotlight-on-ghana; Jason Nicco-Annan, “That’s Momo Like It: Everything You Need To Know About Mobile Money In Ghana,” WorldRemit, accessed October 8, 2021, https://www.worldremit.com/en/blog/money-transfer/mobile-money-ghana.

25 “MTN MoMo Pay Merchant Payments: Expanding Women’s Mobile Money Use in Ghana,” GSMA, accessed June 12, 2022, https://www.gsma.com/mobilefordevelopment/wp-content/uploads/2020/05/MTN-MoMo-Pay-Merchant-Payments-Expanding-Female-Mobile-Money-Usage-in-Ghana.pdf.

26 GSMA, “MTN Mobile Money – Spotlight on Ghana.”

27 Ibid.

28 Ibid.

29 Ibid.

30 Archie Hesse, Bruno Akpaka, and Kwami Williams, “A History of Mobile Money in Ghana,” February 2, 2021, in Decode Fintech, podcast, MP3 audio, 33:20, https://decodefintech.simplecast.com/episodes/mobile-money-in-ghana-CLoEOtNl.

31 “Notice to E-Money Issuers and The General Public: Guidelines for E-Money Issuers in Ghana and Agent Guidelines,” Bank of Ghana, accessed August 10, 2022, https://www.bog.gov.gh/wp-content/uploads/2019/08/NOTICE-Guidelines-for-E-Money-Issues-in-Ghana.pdf.

32 Ibid.

33Ibid., rule 5.

34 Ibid., rules 9, 8, 12, 11, 15, 20, 17, and 26.

35 International Finance Corporation, “IFC, The MasterCard Foundation and Tigo Ghana to Expand Mobile Financial Services in Ghana,” news release, May 27, 2014, https://pressroom.ifc.org/all/pages/PressDetail.aspx?ID=17891; William Yaw Owusu, “Zap Changes to Airtel Money,” Modern Ghana, December 16, 2011, https://www.modernghana.com/news/367341/zap-changes-to-airtel-money.html; Vodafone, “Vodafone Launches M-Pesa in Ghana,” news release, accessed November 15, 2021, https://www.african-markets.com/en/news/west-africa/ghana/m-pesa-hits-280-000-users-in-ghana#:~:text=In%20December%202015%2C%20Vodafone%20launchedSeptember%2C%20according%20to%20Vodafone%20Ghana.

36 Jason Nicco-Annan, “That’s Momo Like It: Everything You Need To Know About Mobile Money In Ghana.”

37 “Mobile Phone Cements Position as Most Used Payment Medium,” Ghana Web, August 31, 2019, https://www.ghanaweb.com/GhanaHomePage/NewsArchive/Mobile-phone-cements-position-as-most-used-payment-medium-777091.

38 Ibid.

39 “Mobile Money Deposits Hit GH¢2.3 Billion In 2017,” Ghana Chamber of Telecommunications, November 30, 2018, https://telecomschamber.com/news-media/industry-news/4823-2; IMARC, “Ghana Mobile Money Market: Industry Trends, Share, Size, Growth, Opportunity and Forecast 2022-2027,” news release, accessed December 7, 2021, https://www.imarcgroup.com/ghana-mobile-money-market?msclkid=2cb526abcf0c11ec9aff50b67a181cfd.

40 Samuel Dowuona, “MTN Ghana Named Significant Market Power to Correct Imbalance in Telecoms Market,” TechGh24, June 10, 2020, https://www.techgh24.com/mtn-ghana-named-significant-market-power-to-correct-imbalance-in-telecoms-market.

41 Ibid.

42 Henry Lancaster, “Ghana Telecoms Market Report: Telcoms, Mobile and Broadband – Statistics and Analyses,” Budde Comm, last updated May 25, 2022, https://www.budde.com.au/Research/Ghana-Telecoms-Mobile-and-Broadband-Statistics-and-Analyses.

43 “Sending Money to All Networks Is Free on Vodafone Cash,” B&FT Online, August 10, 2020, https://thebftonline.com/2020/08/10/sending-money-to-all-networks-is-free-on-vodafone-cash.

44 “Mobile Money Interoperability,” Vodafone Ghana, accessed 20 January 2022, https://vodafone.com.gh/personal/vodafone-cash/products/mobile-money-interoperability.

45 “Payment Systems Strategy (2019-2024),” Bank of Ghana, accessed August 10, 2022, https://www.bog.gov.gh/wp-content/uploads/2022/01/National-Payment-Systems-Strategic-Plan-2019-to-2024-2.pdf.

46 “Payment Systems and Services Act 2019 (Act 987),” Bank of Ghana, accessed August 11, 2022, https://www.bog.gov.gh/wp-content/uploads/2019/08/Payment-Systems-and-Services-Act-2019-Act-987-.pdf See generally section 7 of the act.

47 Ibid., section 9(1).

48 Ibid., section7(1) and section 10.

49 “Overview of CERT-GH,” Cyber Security Authority of Ghana, accessed August 10, 2022, https://csa.gov.gh/cert-gh.php.

50 Honoré Banda, “Ghana’s Banking Bust,” Africa Report, November 22, 2018, https://www.theafricareport.com/445/ghana-finance-banking-bust.

51 Ibid.

52 Isaac Akomea-Frimpong, Charles Andoh, Agnes Akomea-Frimpong, and Yvonne Dwomoh-Okudzeto, “Control of Fraud On Mobile Money Services In Ghana: An Exploratory Study,” Journal of Money Laundering Control 22, no. 2 (2019): 301.

53 Nicholas Brown, “Over 4,000 Cyber Fraud Cases Currently Under Investigation,” Joy Online, April 23, 2021, https://www.myjoyonline.com/over-4000-cyber-fraud-cases-currently-under-investigation/?param=.

54 Stephen Annan, “Avoiding Fraud Due to Mobile Money,” Ghana Web, October 7, 2017, https://www.ghanaweb.com/GhanaHomePage/features/Avoiding-fraud-due-to-Mobile-Money-588682.

55 Veronica Owusu Ansah, “MTN Mobile Money Fraud, An Inside Job?” Ghana Web, October 23, 2017, https://www.ghanaweb.com/GhanaHomePage/NewsArchive/MTN-Mobile-Money-fraud-an-inside-job-593205.

56 Suleiman Mustapha, “MTN Sanctions 3,000 Agents for Mobile Money Fraud,” Graphic Online, October 27, 2017, https://www.graphic.com.gh/news/general-news/mtn-sanctions-3-000-agents-for-mobile-money-fraud.html.

57 “Staff of Telcos Accomplices in Mobile Money Fraud – Police,” Ghana Web, October 23, 2017, https://www.ghanaweb.com/GhanaHomePage/NewsArchive/Staff-of-telcos-accomplices-in-mobile-money-fraud-Police-593227.

58 “3 Mobile Money Fraudsters Busted,” Ghana Web, September 9, 2017, https://www.ghanaweb.com/GhanaHomePage/NewsArchive/3-mobile-money-fraudsters-busted-579138; Judith Frickenstein, “How IT-Security Affects Africa’s Financial System,” Africa Finance Forum Blog (blog), Making Finance Work for Africa, May 8, 2019, https://www.mfw4a.org/blog/how-it-security-affects-africas-financial-system#:~:text=A%20further%20trend%20is%20an%20increase%20in%20attackssystems%20and%20their%20customers%20leading%20to%20cross-border%20challenges.?msclkid=5792f33ccf0e11ec9716779e58bdf70f.

59 Dominic Ayamga, “Telecommunication Fraud Prevention Policies and Implementation Challenges” (master’s thesis, Luleå University of Technology, 2018), https://www.diva-portal.org/smash/get/diva2:1222014/FULLTEXT01.pdf.

60 William Carter, “Forces Shaping the Cyber Threat Landscape for Financial Institutions,” Swift Institute, October 2, 2017, https://www.swiftinstitute.org/wp-content/uploads/2017/10/SIWP-2016-004-Cyber-Threat-Landscape-Carter-Final.pdf.

61 PK Senyo, “Ghana’s New Mobile Money Rule Could Derail Financial Inclusion. But There Are Answers,” The Conversation, April 18, 2021, https://theconversation.com/ghanas-new-mobile-money-rule-could-derail-financial-inclusion-but-there-are-answers-158770.

62 “Digital Financial Services Policy,” Government of Ghana Ministry of Finance, accessed August 11, 2022, 12–13, https://mofep.gov.gh/sites/default/files/acts/Ghana_DFS_Policy.pdf.

63 PK Senyo, “There Will Be No Escaping Ghana’s New Levy on Electronic Transactions,” Quartz Africa, November 19, 2021, https://qz.com/africa/2092221/ghana-introduces-a-1-75-percent-levy-on-electronic-transactions.

64 PK Senyo, “Ghanaians Should Brace Themselves: The Electronic Transactions Tax Is Here to Stay,” The Conversation, November 18, 2021, https://theconversation.com/ghanaians-should-brace-themselves-the-electronic-transactions-tax-is-here-to-stay-172153.

65 Haleed Sulemana, “Ghana’s New E-Levy Will Weaken Its Financial System,” African Liberty, February 14, 2022, https://www.africanliberty.org/2022/02/14/ghanas-new-e-levy-policy-will-weaken-the-countrys-financial-system/#:~:text=On%2017%20November%202021%2C%20Ghana%E2%80%99s%20finance%20minister%20Kenfrom%2013%20percent%20to%2016%20percent%2C%20or%20more; “E-Levy Bill to Be Re-laid in Parliament on January 25 – Finance Minister,” Ghana Web, January 20, 2022, https://www.ghanaweb.com/GhanaHomePage/business/E-Levy-Bill-to-be-re-laid-in-parliament-on-January-25-Finance-Minister-1449415.

66 Jacob Agyenim Boateng, “Panic Withdrawals Hit Mobile Money Nationwide Over 1.7% E-Levy,” Modern Ghana, November 19, 2021, https://www.modernghana.com/news/1119795/panic-withdrawals-hit-mobile-money-nationwide-over.html.

67 “E-Levy: Government Is Spending GH¢89,400 Per Town Hall Meeting – STRANEK Claims,” Ghana Web, February 14, 2022, https://www.ghanaweb.com/GhanaHomePage/business/E-levy-Government-is-spending-89-400-per-town-hall-meeting-STRANEK-claims-1468735.

68 Nii Larte Lartey, “Gov’t Puts Withdrawal, Relaying Of E-Levy Bill On Hold; Goes For An Amendment,” Citi Newsroom, February 13, 2022, https://citinewsroom.com/2022/02/govt-puts-withdrawal-relaying-of-e-levy-bill-on-hold-goes-for-an-amendment.

69 Edna Agnes Boakye, “Concerned Ghanaians to Stage ‘Yentua’ Demo Against E-Levy Today,” Citi Newsroom, February 10, 2022, https://citinewsroom.com/2022/02/concerned-ghanaians-to-stage-yentua-demo-against-e-levy-today.

70 Cooper Inveen, “Ghana Approves Tax on Electronic Payments Despite Opposition Protest,” Reuters, April 1, 2022, https://www.reuters.com/world/africa/ghana-approves-tax-electronic-payments-despite-opposition-protest-2022-03-29/?msclkid=1362f982cfe811ecbe3f3c3de6b24189.

71 Jacob Agyenim Boateng, “Panic Withdrawals Hit Mobile Money Nationwide Over 1.7% E-Levy”; “E-Levy: Telecom Chamber Warns Public Against Fraudsters,” Ghana Web, May 9, 2022, https://www.ghanaweb.com/GhanaHomePage/NewsArchive/E-levy-Telecom-Chamber-warns-public-against-fraudsters-1533860?msclkid=3041c6decfdd11eca8e1dd075723d268.

72 “National SIM Card Registration Takes Off Next Month (October) | Ministry of Communications,” Ministry of Communications and Digitisation, accessed November 15, 2021, http://m.ghheadlines.com/agency/ghanaian-times/20210906/150486263/national-sim-card-registration-exercise-begin-next-month.

73 Asli Demirgüç-Kunt, Leora Klapper, Dorothe Singer, and Saniya Ansar, “The Global Findex Database 2021,” World Bank, accessed August 10, 2022, https://www.worldbank.org/en/publication/globalfindex/Report. The database notes that more than 100 million unbanked adults in sub-Saharan Africa have no ID.

74 Tawanda Karombo, “Ghana’s Process for Adding Banking to its Biometric Card is a Flawed One,” Quartz Africa, last updated July 20, 2022, https://qz.com/africa/2117872/ghana-card-being-linked-to-banking-is-frustrating-ghanaians.

75 “Extend SIM card re-registration deadline to end of 2022 — NIA cries to government,” Modern Ghana, February 23, 2022, https://www.modernghana.com/news/1140806/extend-sim-card-re-registration-deadline-to-end.html.

76 “MTN MoMo Customers To Present ID Cards For All Momo Cash-Out Transactions,” B&FT Online, March 16, 2021, https://thebftonline.com/2021/03/16/mtn-momo-customers-to-present-id-cards-for-all-momo-cash-out-transactions.

77 Ibid.

78 “Mobile Money Fraudsters Now Target Bank Accounts Linked to MoMo Accounts,” Ghana Chamber of Telecommunications, July 15, 2020, https://telecomschamber.com/news-media/industry-news/mobile-money-fraudsters-now-target-bank-accounts-linked-to-momo-accounts#:%7E:text=Mobile%20money%2C%20which%20has%20becometo%20a%20mobile%20phone%20number.&text=Gustav%20Herbert%20Yankson%20indicateS%20that,as%20against%20278%20in%202015.

79 “Digital Financial Inclusion,” World Bank, accessed August 11, 2022, https://www.worldbank.org/en/topic/financialinclusion/publication/digital-financial-inclusion.

80 Alexander Dunaev, “Governments Key to Solving Financial Inclusion,” Finextra, December 5, 2018, https://www.finextra.com/blogposting/16391/governments-key-to-solving-financial-inclusion.

81 “African Union Convention on Cyber Security and Personal Data Protection,” African Union, last updated May 11, 2020, https://au.int/en/treaties/african-union-convention-cyber-security-and-personal-data-protection. This convention is yet to enter into force. Referring specifically to this policy (introduced earlier in the essay): https://mofep.gov.gh/sites/default/files/acts/Ghana_DFS_Policy.pdf

82 Tom Collins, “Kenya and Ghana Lead World in Mobile Money,” African Business, July 26, 2021, https://african.business/2021/07/technology-information/kenya-and-ghana-lead-world-in-mobile-money.

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