Electronic money transfer causes massive drop in cheque usage

The number of bank transactions involving cheques have gradually been reducing over the years.

This development has been attributed to the increase in the digitization of payment systems in the country.

The use of cheques has been with us for as long as the banking itself. But with the number of payment options available to Ghanaians increasing, the use of cheques appear to be dwindling slowly.

According to data from the Bank of Ghana, in 2016 the total number of ordinary cheques issued which clear in 3 days, was 6,937,652.

This number reduced to 6,880,257 in 2017. The trend continued in the first half of 2018. The number of cheques issued in the first half of 2017 which was 3,434,736, reduced to 3,386,926 in the first half of this year.

A Co-founder of Software engineering company CYST, Nii Osae Osae Dade explained that the delays in clearing cheques could account for the decrease in its usage.

“From the way we see it in the financial technology space, most people will send out cheques which will clear in sometimes a day or three days. But these days people are in desire for instant payment mainly associated with the speed of payment associated with mobile money.”

He added that business have now joined in, and are calling for more instant payments.

“You realize that some businesses have gone in for merchant accounts on the mobile money platform which they end up running like a bank account. They’re payments which more instant. As time goes on, with the proliferation of mobile money in the system the businesses who would have hitherto accepted a cheque are now asking for payments via mobile money.”

According to the BoG data, between the first half of 2017 and the first half of 2018, the total value of mobile money transactions shot up significantly from 68.2 billion to 104.6 billion cedis.

This translates into about a 53 percent rise for the period.

Such an impressive growth coupled with other developments are aiding in governments drive towards a cashlite society.

But a recent consideration of a mobile money tax on the part of government has made many stakeholders worried that the gains achieved on the digital payment front could be reversed with the introduction of such a tax.

The Forbes Africa 30 under 30 member, Nii Osae Osae Dade believes government should rather focus on making the use of digital payment platforms more affordable.

He argued that “even though current charges on payment platforms like mobile money are affordable they can be better. So taxing a platform like mobile money will be counter intuitive, because people will be discouraged from joining. If government however reduces charges it will lead to more people joining the platform”.

Source: Citi Business News

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