Ghana – digital payments in the Covid-19 era
Ghana has been taking steps to sustain its economy amidst the coronavirus pandemic and related lock-downs and has started multiple initiatives. African countries, in general, have taken a hard knock from the impact of the pandemic and most countries remain in the early stages. The Ghanaian government’s quest to ease the pain of small businesses from the devastating consequences of the novel coronavirus is expected to reach at least 200,000 companies, as said by the National Board for Small Scale Industries (NBSSI). Finance Minister Ken Ofori-Atta in March announced that as part of the Coronavirus Alleviation Program (CAP), an amount of GHS 600 M is to be given to businesses to provide relief in these difficult times. The money will be distributed to small businesses through either mobile money or banks accounts.
Earlier this month, the Bank of Ghana (BoG) announced the establishment of a new office to oversee the growth and regulation of Financial Technology (FinTech) and innovation in the country. This new FinTech and Innovation Office by the BoG will be responsible for licensing and oversight of dedicated electronic money issuers (mobile money operators), payment service providers (PSPs), closed-loop payment products, payment support solutions and other emerging forms of payment delivered by non-bank entities.
Clear Junction, a London-based global fintech company that offers end-to end regulated payment solutions based on in-house technology, has signed an agreement establishing a partnership with Zeepay, a leading African fintech company, headquartered in Ghana. The partnership will allow Clear Junction to offer correspondent accounts for collecting payments in the European Union and the UK that will enable Zeepay’s peer to peer remittance service for Ghanaians living in Europe, allowing them to send money to their families in the homeland. In late March, the Bank of Ghana granted Zeepay a license to operate a full Electronic Money Issuer (EMI) service, allowing customers to send and receive money across a 150,000-agent network and perform other mobile financial services. Mobile money operators such as Zeepay have been benefiting from an uptick in transaction volumes through their platforms during the crisis period, as consumers look for financial and payment solutions which can be accessed while observing social distancing.
Verdant Capital is currently assisting Zeepay with a debt and equity capital of USD 4 million in aggregate to meet the Bank of Ghana’s requirements and to fund the roll-out of the new products.