According to data from the Bank of Ghana, the total value of mobile money transactions far exceeded the value of cheque transactions, by GH¢389 billion in 2020.

The value of MoMo transactions was estimated at GH¢569 billion in the 2020 fiscal year, that of cheques was about GH¢180 billion at the close of the trading year.

Speaking to an Economist at the University of Ghana Business School, Dr Lord Mensah on the reasons why MoMo is exceeding cheques from an economic perspective, he explained that, the process of issuing cheques is quite cumbersome hence the high demand for MoMo which is simple and fast.

“The reason why this mobile money transaction is overtaking the cheques in Ghana is that for someone to hold a cheque they might have saved with the bank for some time and the person should have owned a current account for some time to a certain level. Now we have so many people outside the banking net, outside just the current accounts level and by so doing if these people have mobile money and they can transact comfortably why won’t they use that medium, it is easy and convenient,” he said.

The significant difference between the total value of mobile money transactions and a cheque for last year indicates that majority of consumers, particularly retail customers, have now accepted mobile money (MoMo) for payment and transactions rather than cheque clearing. This is because it is instant, faster, convenient and less cumbersome.

With cheque transactions expected to decline in the coming years, banks will have to find innovative ways to rake in revenue, whilst retaining existing customers.

Explaining the way forward out of this for the banking industry, Dr Mensah said, the banks need to find a way to integrate the MoMo system across all platform on their banking system.

“Now what the banks are supposed to do which I have seen a lot of banks started it, is developing Apps that will integrate the mobile money transaction onto their platform as I sit here, I use Ecobank App to do most of my transaction, it is more or less a mobile money because I transfer directly from my bank account into my MoMo wallet, so effectively it is becoming more convenient and once there is that convenience you should expect that people will adjust more quickly to it”.

However, cheque transactions will be mainly used by wholesale or corporate consumers who have no choice but to issue cheques for payments.

Beside ATM cards and other electronic products, they will have no option to introduce their own mobile money solutions in order to compete with the telecom firms.

Alternatively, they will have to collaborate with the telcos to develop their mobile banking solutions or keep their MoMo transaction funds for a reasonable period, so that they can earn enough floating income.

Meanwhile, the BoG data also showed that registered mobile money accounts stood at GH¢38.5 million at the end of 2020 with active mobile money accounts at 17.1 million.