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Ghana: How public transport could help increase use of mobile money

Ghana is considering asking public transport operators to accept mobile money to increase the use of cashless payments.

The aim is to use public transport, including buses, as a way to scale up the uses of mobile money beyond simple cash transfers, a source close to discussions tells The Africa Report. Consultations with owners, transport unions and development partners are ongoing and a decision may be made in the coming months.

Ghana has one of Africa’s highest rates of mobile money usage, yet still lags behind Kenya. According to Boston Consulting Group, transactions via mobile wallets and phones represent 87% of Kenya’s GDP, while in Ghana, they account for 82%.

Ghana needs a cyber-conscious culture, especially in financial institutions and small businesses, with a national programme to raise awareness of cybersecurity risks, the report says.

Tro-tro minibuses are Accra’s most widely used form of transportation. They can take up to 19 people and, before Covid-19, were transporting 70% of the city’s residents.

In May 2020, Ghana adopted The Cash-Lite Roadmap, designed to promote better access to financial services. The government set up a new Digital Payments Coordination Unit (DPCU) to drive implementation.

Key parts of the cash-lite strategy are to enforce digital payments for all government services, especially in urban areas. The plan aims to digitise the transportation sector with “tap and go” technology at toll booths and cashless car parks and truck stations.

According to the World Bank researchers led by Eva Clemente Miranda, Ghana remains a cash-based economy.

Cash accounts for 98.7% of payments by volume, and the main non-cash instrument continues to be cheques.

  • The country needs to do more to improve its digital infrastructure, argues the World Bank.
  • Most of the infrastructure is concentrated in urban and commercial areas, with many rural areas lacking effective coverage. Internet costs remain high and access low, especially in rural areas.
  • Ghana needs a cyber-conscious culture, especially in financial institutions and small businesses, with a national programme to raise awareness of cybersecurity risks, the report says.

Cash lite

The government has identified a series of obstacles to wider mobile money use. These include:
Lack of policies mandating or incentivising digital payments, an entrenched cash culture and low financial literacy and awareness.

  • The search is therefore on for use-cases that can accelerate the shift to digital payments.
  • These include payment of fees for government products, services and fines, payments to public utilities, such as water and electricity, and merchant and retail transactions.

“Lots of hand-holding is required” to help people and businesses understand the benefits of digital payments, says Derrydean Dadzie, a consultant who is coordinating the DPCU’s work.

He gives the example of food markets, where sellers will typically refuse when he tries to pay with mobile money. “Many merchants just don’t want it.”

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