The Ghana Interbank Payment and Settlement Systems (GhIPSS) is calling for a policy that discourages cash-based transactions as the country seeks to promote a cashless economy.
Over 80 percent of businesses in the country are micro-, small- and medium-scale enterprises, controlling over 50 percent of the total cash in the economy. However, the majority of them have no bank accounts nor use any card-based product.
This has created difficulty for government in fashioning out a way of roping-in the informal sector for tax purposes a situation Archie Hesse, Chief Executive Officer of GhIPSS, believes can be addressed if there is a policy in place that motivates people to switch to card- and electronic-based transactions.
"There should be a policy that discourages individuals from using cash for transactions, because in advanced countries most transactions are made via credit/debit cards and this is the way to go."
One of the successful cash-less programmes executed was by the Nigerian central bank, which made it a matter of policy to introduce a cash-handling charge on daily cash withdrawals beyond a certain threshold.
In Ghana, in spite of the heavy investment and promotion of card-based and other electronic products by GhIPSS and Financial institutions, there is still low penetration of card-based products. This has meant that there is more cash used in daily transactions by corporate institutions, banks, and traders.
This results in a lot of money outside the formal economy, thereby limiting the effectiveness of monetary policy in managing inflation and other variables.
Mr. Hesse said "merchants should also encourage their customers to pay using cards".
Earlier in the year, the Bank of Ghana directed all banks to deploy e-zwich point-of-sale terminals (POS) at all their branches and agencies by June 30, 2014 and issue the e-zwich card introduced by GhIPSS to every customer.
The move by the central bank is expected to set the stage for the public to switch to using electronic cards to make payments instead of the continuous use of cash.
GhIPSS currently manages the National Switch and Biometric Smart Card Payment System, e-zwich and the Cheque Codeline Clearing (CCC) and Automated Clearing House (GACH) systems.
GhIPSS also introduced gh-link, an interbank system that allows customers of one bank to use their debit cards in other banks&qout; ATMs.