Chief Executive of Mobile Money Limited (MTN MoMo), Eli Hini has stated that for Ghana’s central bank digital currency (CBDC) – eCedi, to take a centre stage in digital payments, there is a need for a massive public education and investment into the right infrastructure to ready the entire ecosystem.
He was speaking at the Stakeholder Forum on the Impact of CBDC on the Future of Digital Payments, organized by MTN as part of this year’s MTN MoMo Month celebration.
The forum saw a panel of four from the regulatory (Bank of Ghana), telcos (MTN), banks (CalBank) and Fintech (IT Consortium) make separate presentations, but all of them agreed on one thing – that for eCedi to be widely adopted for payments, there is the need to ensure it behaves exactly like cash, such that users can trust it and be sure of its immediate availability always.
Eli Hini said for the public to trust that eCedi is safe and secure, it would require massive and constant education, adding that the education would have to be complimented with an equally massive investment into critical infrastructure in the entire ecosystem to ensure that when users want to pay with eCedi, the targeted receiving entity is provisioned sufficiently to accept same.
He also noted that stakeholders must figure out how to prevent challenges that will make users stranded and unable to use eCedi for payments always.
The MTN MoMo CEO, for instance, cited the example of the Caribbean, where CBDC is widely used, but a recent technical hitch on the platform affected people’s ability to access their digital funds for transaction.
He argued that this kind of hitches that interfere with the immediate availability of the CBDC, kills user confidence and trust, because to the ordinary end user, cash does not behave in the manner, so CBDC should not.
Meanwhile, the central bank is currently holding a series of workshops for the media to educate them on CBDC and blockchain, as it gears up to embark on a massive and widespread public education ahead of the public rollout of the eCedi.
BoG
Deputy Head of Fintech and Innovation at Bank of Ghana, Clarence Blay said the rollout of Ghana’s eCedi has been designed on the indirect approach model – meaning the central bank will depend on the existing digital finance infrastructure at the banks, telcos and fintechs, so that end users will remain eCedi customers of the private entities and not Bank of Ghana.
He, however, noted that the central bank will ensure that, whereas it will not reinvent the wheel in terms of the infrastructure for eCedi, it will not take onboard the current inefficiencies of the existing infrastructure because those challenges will impact the adoption of the eCedi negatively.
Clarence Blay assured the public that the ongoing eCedi pilot with selected customers of Vodafone Ghana, IT Consortium and Calbank, has so far proven very successful and the learnings will impact the final design before the rollout to the general public.
He said one key benefit of eCedi to the end user is cheaper transaction cost, explaining that there is no transfer fee for eCedi from the end of BoG, except for a minimal maintenance fee to be paid to the private digital platform owners, and that is expected to be lesser than the current service fees on mobile money and other digital wallets.
According to Clarence Blay, the central bank is particularly keen on the eCedi because it promises to deepen financial inclusion to a very large extent, especially because its usage will be far less costly to the end user, and it also has an offline version that allows usage even in the event of technical challenges on the online version.
He said BoG has decided not to issue a fiat against cash, so eCedi will be rolled out alongside cash usage so that end users would have the benefit of choice when they want to make payments. Indeed, mobile money and other digital wallets are also available for payments.
Calbank
Head of Digital and Inclusive Banking at Calbank, Martha Acquaye noted that during the pilot, one emerging trend was the penchant of users to do cash out from their eCedi wallets instead of using the wallet for payments directly.
She said the bank is therefore recruiting and training merchants across the country to educate and encourage people to use eCedi for direct payments instead of cashing out.
Martha Acquaye also appealed to the central bank not to make eCedi wallets attract interest like mobile money does, saying that if eCedi wallets are allowed to attract interest it will impact bank deposits negatively and that will lead to high cost of lending due to scarcity of cash.
“If you allow eCedi to attract interest people will most likely move a greater chunk of the bank deposits into their eCedi wallets and that will impact the banks negative,” she explained. “Since the central bank has said that eCedi is not designed to disadvantage any industry player, we believe that allowing eCedi wallets to attract interest should not be the way to go.”
IT Consortium
CEO of IT Consortium, Romeo Bugyei said eCedi has come to stay and all industry players and the general public must have the attitude of accepting it “just like we accepted mobile money and it has now become ubiquitous and a primary means of payment.”
He believes that because eCedi will be riding on the existing digital infrastructure that has made mobile money a huge success, its adoption and success will come even quicker.
Romeo Bugyei pointed out that Ghana’s eCedi is also designed in a way to prevent its use for fraudulent transactions such as money laundering and terrorism funding.
He explained that the online version is visible to the entire ecosystem 24/7 real-time, while the offline version also has limits on how much can be transacted in a day, and once certain thresholds are hit by particular wallets, it will be flagged for closer monitoring.
