Financial Sector Development in Africa: Opportunities ... - World Bank

68 Porteous
Box 2.3 (continued)
than magstripe cards and standard POS devices, so established banks’ participation
was grudging. Conversely, some smaller banks saw the advantage of being
able to offer customers access to the larger eZwich network. However, usage of
cards (at 1.5 deposits and 1 withdrawal per card per year in 2009) has been very
low, prompting concerns that merchants had little reason to maintain the device
since few customers sought to use it.
Over the same period as the rollout of eZwich, mobile penetration in Ghana
had doubled to 67 percent. Under branchless banking guidelines, three nonbank
mobile payment systems received BOG’s approval to launch in 2009. This enabled
nonbanks to offer real-time, person-to-person payment and bill payment capabilities.
One of these systems, offered by MTN (the largest network operator) in
conjunction with seven banks, reported 160,000 customers and 2,300 agents
within five months after the launch.
The speed of growth in mobile coverage and penetration was not foreseen at
the time BOG selected an offline solution. While the more expensive offline
eZwich solution struggles to gain traction in a market with increasing options for
electronic payments, the central switching capability that GhIPSS offers remains
attractive to banks and especially new payment providers. In 2010, GhIPSS is considering
implementing additional switching solutions, which may enable interconnection
of other devices, including mobile.
Source: BFA 2010b.
New Questions Raised by the Third Generation
The arrival of third-generation models accelerates and intensifies some of
the issues raised by the previous generations, since third-generation reach
may be much wider; the risks to vulnerable consumers may also be
higher.
In particular, since MNOs are no longer the gatekeepers for financial
solutions (as they were in many second-generation models), there are
new risks as well as new opportunities. On the positive side, thirdgeneration
providers face fewer barriers to entry in building on the use
of the Internet channel. The entry of a new generation of small providers
earlier may entice incumbents to provide more affordable and
appropriate solutions for different population segments. On the other
hand, the new entrants will likely lack the financial substance and large
brands of MNOs—strong financial substance and brands have ensured