Mobile Money services have become so widely used in Ghana that it is easy to take it for granted. Indeed, even though it was only introduced in the country a decade ago, it takes an effort for most people to even remember how retail payments and transfers of money within Ghana were commonly executed hitherto, outside of using cash itself.

But the simple truth is that mobile money, introduced into Ghana in 2009 by the undisputed telecoms industry leader, MTN Ghana, is the most revolutionary financial product available in the country since financial intermediation itself was introduced nearly a century and a half ago; and with regards to modes of making payments and financial transfers it is the most important invention since cash, in the form of currency notes and coins became generally acceptable centuries ago.

Instructively, beyond becoming the widely used mode of payments outside of cash itself, MoMo is also the forerunner of all the mobile phone- utilizing digital financial service channels that are offered by virtually every financial services company in Ghana today, and which are used by nearly every user of formal financial services around the country currently.

Before the advent of MoMo, digital banking only used laptop or desk top computers; but by making financial services available through mobile phones for the first time, MoMo taught the industry that they could vastly improve their market penetration – whether for financial intermediation, insurance, pensions or investment products – by making their services available through mobile phones which most adults have, unlike computers which are owned and used by a much smaller proportion of the public.

Thus, not only has MoMo contributed more to actualizing financial inclusion than any other type of product, it has also led to dramatically increased use of financial products of all kinds by people who were already financially included.

Even now though, mobile money as a genre of financial services is still only beginning its roll out and consequent impact. Value added products are still being engineered through the MoMo platform, the most impactful being MTN’s Qwik Loan product which enables customers to take immediate, retail sized loans entirely through their mobile phones, with no collateral, no documentation and with disbursement made immediately.

Interestingly, this novel loan product is experiencing insignificantly low default rates, even as traditional retail loans given by dedicated financial intermediaries suffer defaults on average of well over GHc1 on every GHc10 lent out.

It is crucially instructive that this product has been pioneered by MTN, the same company that introduced MoMo in the first place. MTN continues to pioneer the MoMo industry – its services are now delivered through a wholly owned, dedicated subsidiary called Mobile Money Limited, which is regulated by the Bank of Ghana – and has been rewarded with a dominant market share of over 90 percent despite concerted competition from two other service providers.

Today, MTN MoMo can be used for money transfers; airtime top-ups; bulk payments; general payments; bulk payroll payments; school fees payment, savings and investment; international remittances; insurance; and ATM cash-outs. MoMo electronic wallets on customers phones are directly connected to their bank accounts so they do not even need to load value onto their phones.

Nevertheless interest is earned on the credit balances held on their electronic wallets, which is competitive against the interest rates paid by the banks themselves on their savings accounts and current account balances.

The conventional wisdom, prior to the advent of interoperability between the three service providers was that MTN dominated the market so heavily simply because it had first mover advantage and had established a critical mass of customers so that one had to sign up to MTN MoMo because joining any of the other two would only allow usage with less than five percent of MoMo users as a whole.

Consequently it was widely anticipated that the introduction of MoMo would result in a dramatic loss of market share by MTN.

But this has not happened; indeed conversely MTN has actually further increased its market share since then.

The reason for this should have been foreseen. Simply put MTN offers the best service in terms of pricing, availability, variety of value added services and consequent practical uses, as well as sheer service quality. Furthermore it is easily the most visible of the three brand offerings in the market.

None of this has happened by chance. It is instructive than when MTN Ghana decided to invest heavily in MoMo infrastructure and an accompanying intense advertising and public awareness campaign a decade ago, its competitors viewed the move with sceptism, despite the success of the product in East Africa through Safaricom. MTN consequently made maximum use of pioneer advantage.

This was backed up with unparalleled capital expenditure – over the past decade MTN has done more capital expenditure on MoMo related infrastructure and running costs every year than both its direct competitors put together.

This includes marketing costs; MTN MoMo is far and away the most visible of the three alternatives on offer in Ghana, an advantage further enhanced by MTN’s lesser, but still substantial market share dominance with regards to voice telephony, access to which provides access to MoMo services.

Added to its innovative value added products such as Qwik Loan and Express Loan, and all this puts it so far ahead of the competition that MTN MoMo is more likely to increase its market share than lose some of it.

MTN is deservedly reaping the rewards for its foresight, technical know-how, huge capital investment, commitment to excellent customer service and innovation. In 2019, MoMo contributed 18.6 percent of MTN Ghana’s revenues, this amounting to GHc1.0 billion.

Importantly it is, along with data services, the biggest contributor to the Group’s growth. In 2019, its MoMo subscriber base grew by 10.6 percent to 15.1 million registered subscribers of which 9.1 million were fully active last year.

This in turn makes it a major driver of the good fortunes being enjoyed by the company’s shareholders, compared with alternative equity investment options available on the Ghana Stock Exchange.

But the biggest beneficiaries are the Ghanaian economy as a whole, and its component parts in the form of the efficiency and productivity of enterprises, entrepreneurs and their employees who use MTN MoMo; the generation of employment for the hundreds of thousands of Ghanaians who are part of the service delivery chain; the banking industry which acts as custodians of the actual funds available on MoMo electronic wallets; and perhaps most importantly, the wider general public who now enjoy unprecedented convenience and cheapness of transaction costs with regards to payments and monetary transfers, e-commerce, retail portfolio investments, and a lot more.

“Financial inclusion is important in order to formalize the economy” asserts Eli Hini, General Manager of MTN’s, dedicated subsidiary, Mobile Money Limited. “MoMo has been a key driver over the past decade. The presence of MoMo agents across the country brings convenience to the unbanked and has allowed penetration to deeper communities where there are no formal financial institutions, and the processing of small transaction values (which banks tend to discourage through their tariff structures) enables participation by even the smallest enterprises and the poorest households.”

This has been particularly useful in the rural hinterlands which are predominantly agrarian. Ghana’s agricultural sector, is the country’s biggest employer, adjudged by sector and its products account for half the expenditure of the average household, all this making it the most important sector with regards to the economic fortunes of the Ghanaian populace.

“MoMo has had a significant impact on the agricultural value chain in Ghana particularly within the cocoa industry” notes Hini. “Today the service is gone beyond just payment to farmers to efficient ways of monitoring the quantity of produce purchased from the farmer, amounts to be paid and so on.”

On a wider level, MoMo has made business processes easier and cheaper. By providing an easy, immediate way to make payments and other monetary transfers, businesses no longer have to cart loads of cash around, which adds to their monetary costs and time consumed. MoMo driven value added products and services make for all round business efficiency.

Another positive impact made by MoMo is the upsurge of related industries. The rapidly expanding financial technology industry owes its growth largely to MoMo.

For instance some fintechs were established and grew beyond early stage primarily to provide inter-operability between various MoMo platforms before Ghana Interbank Payments and Settlements Services (GhIPSS) established a universal interoperability platform.

Similarly, MTN MoMo propelled the micro-credit industry with its ground breaking collaboration with AFB (now Letshego) to introduce Qwik Loans, followed more recently by a similar one with Ecobank to offer Express Loans.

On the other side of the financial intermediation balance sheet is MTN’s Yellosave, a savings scheme operated through MoMo.

A similar collaboration with Ayo pioneered micro-insurance, and MoMo has driven the introduction of an informal pensions industry in Ghana as well. Investments in government treasury bills have been opened up to the grassroots through TB4all, a product created by a collaboration between MTN MoMo and Ecobank.

The use of MoMo to pay for shares during MTN Ghana’s own Initial Public Offer in 2018 has opened the door for the use of the platform for transactions on the Ghana Stock Exchange too.

All these have accelerated financial inclusion in Ghana extending it beyond formalized payment platform to include grassroots participation in financial intermediation, life insurance, investment in financial securities and the pensions market.

Inward remittances from abroad have also been made more accessible through the use of MoMo. International remittances received by MTN MoMo customers continue to increase by the month. Over the one year period June 2018 to June 2019 alone, a total of GHc2.19 billion was received by the company’s MoMo customers into their electronic wallets from abroad.

Then there is its impact on job creation, which is critical in Ghana’s economy with its inordinately high unemployment rate. Apart from the huge number of jobs created indirectly through MoMo’s positive impact on private enterprise in general, MTN had 153,000 active agents nationwide by the end of 2019. Add to these another 5,000 field and mobile agents working to bring the service to the doorsteps of customers.

Despite its phenomenal success however, MoMo has had to navigate some rocky terrain. Inevitably cybercrime has been extended to MoMo transactions. Here, MTN has again led the industry raising its firewalls to the extent that cyber fraud is only possible if a customer fails to adhere to the simple, but effective safety protocols. However as MoMo- driven financial products expand in scope, new threats will inevitable emerge,

Advises Hini: “There is the need to deepen cyber security policy discussions to standardize its implementation across the various industries.”

An even bigger threat though emanates from government’s fiscal ambitions which evidently consider MoMo as a low hanging fruit that can be exploited to improve the public fiscal position.

Although it has dropped plans to tax MoMo transactions for now, having learnt a lesson from the experiences of other African countries – for instance Uganda reversed its taxes after suffering a 33 percent drop in MoMo transaction volumes and a US$1.2 billion fall in transaction value within three months of introducing the taxes – it still wants to apply a special tax on fees charged by service providers despite their already paying the usual corporate income taxes.

“Relevant taxes are already being paid by customers who use the service just like any other means of payment” points out Hini who goes on to warn that. “Implementing additional taxes on mobile financial services will have a negative ripple effect on the service and other related industries. Tax on the service will derail the effort towards achieving the cash lite and government digital payment agenda.”

Rather he suggests six ways to grow the MoMo industry and further enhance its already transformational impact.

“Digitize the merchant payment eco-system beyond formal merchants to open markets using MoMo” he recommends. “Facilitate seamless integration of businesses into the MoMo ecosystem; government should fast track the national ID issuing process; the regulator (Bank of Ghana) should increase transaction wallet limits or introduce subscriber tiers with higher transaction limits; government should support initiatives to digitize agriculture, health and other key value chains; and it should expedite action on the digitalization of the person –to- government and government- to- person space to increase the efficiency of collections and payments.”

Considering just how impact MoMo has made over its first decade in Ghana it is mind-boggling to try and imagine what can be achieved through its use during its second decade, which has now begun. Especially with the innovative, customer focused, operationally efficient MTN Ghana leading the way through its subsidiary, Mobile Money Limited.