Cashless Revolution: Ghana’s e-Cedi, digital payments set to soar in 2023
Ghana is set to witness a significant shift towards cashless transactions in 2023, according to Luis Cambronero Pérez, Head of Partnerships and API Sales at AZA Finance. The popularity of digital payments has grown exponentially in recent years, with mobile money transactions surpassing GH¢1trillion, a significant increase from the GH¢902billion recorded in 2021. Despite initial concerns over the introduction of the E-levy last year, the trend towards digital payments has continued to rise, and Pérez believes that the e-Cedi, along with other digital payment tools, will play a key role in the cashless revolution.
The Bank of Ghana (BoG) is looking to replicate the success of mobile money by introducing a central bank digital currency (CBDC) that will further deepen the use of digital payments. According to Pérez, digital payments offer numerous advantages, including increased security, transparency, and efficiency. These benefits are particularly important for small businesses and individuals who often struggle with the cost and inconvenience of handling cash.
Last year, the BoG piloted its CBDC with offline capabilities in Sefwi Asafo and other communities, where it was well-received. The potential benefits of CBDCs have been recognized globally, with approximately 110 countries, representing 95% of global GDP, exploring the possibility of introducing their own CBDCs.
However, Pérez highlights the importance of regulation in driving the adoption of digital payments. He commends the Bank of Ghana for its proactivity in this regard, stating that regulation will play a crucial role in determining the speed of adoption. In the fast-paced world of technology, the right regulatory environment can make all the difference.
Pérez also believes that Africa’s young population will be key in driving the adoption of digital payments. Over 60% of the population in Africa is aged below 25 years, and by 2030, young Africans are projected to make up 42% of the worldwide youth population. Pérez sees this demographic as a significant advantage for Africa, stating that young people are the drivers and users of many innovative tools. As a top-five destination for fintech funding, Ghana is well-positioned to benefit significantly from this trend.
The shift towards cashless transactions in Ghana is set to accelerate in 2023, driven by the increasing popularity of digital payments and the introduction of the e-Cedi and CBDCs. The potential benefits of digital payments are numerous, including increased security, transparency, and efficiency. However, regulation will play a crucial role in driving adoption, and the importance of Africa’s young population cannot be overstated. As Ghana continues to emerge as a leading destination for fintech funding, it is well-positioned to capitalize on these trends and drive the growth of digital payments in the region.
