THE “e-zwich experiment” in Ghana has been enthusiastically received with 16 banks, over 110 businesses and thousands of individuals in Accra signing up to its pilot stage of operation.

E-zwich is a banking system that provides a common electronic platform linking the payment systems of all licensed banks and non-bank financial institutions in the country.

In Africa the system has been adopted in South Africa, Botswana, Nigeria, Malawi and Rwanda, but Ghana is the first country to take on the challenge of achieving national integration. In all other countries, integration has been between two or three banks only.

Since the Accra trial started on April 28 this year, 16 banks have signed up to e-zwich, but the private corporation responsible for its administration, the Ghana Interbank Payment and Settlement System (GhIPSS), said all 26 banks would be integrated into the system by the end of this month.

Clients of e-zwich can load funds onto “smart cards”, which act in a similar way to bank debit cards, except they require biometric (fingerprint) identification instead of pin numbers and the cards can work in e-zwich Point of Sale (POS) machines that are “off-line”, or do not require an active connection to the bank.

The GhIPPS General Manager of Projects and Business Development, Mr Archie Hesse, said high connection costs, limited electricity and unreliable telecommunications in rural areas had prevented a majority of the population from being able to make use of the Electronic Funds Transfer Point of Sale (EFTPOS) machines and other financial services.

For other bankcards to work in EFTPOS machines the merchant requires an “online” connection to the bank through telecommunication services to complete the transaction. He said as a result, and also due to infrastructure difficulties, not many banks are set up in rural areas and 80 per cent of the bankable population either do not own bank accounts or are “under-banked”, i.e. they do not have regular access to financial services.

“This is not helping the country because we want to have money in the banking system so the government can have access to it for investment purposes,” he said. “This is going to be of benefit to the economy and Ghanaians as well.”

The Bank of Ghana, through the newly formed GhIPSS, is using e-zwich to tap into this market with the hope of eventually creating a “cashless economy”.

GhIPSS Chief Executive Officer, Mr Frederick France, said his company was on-target and using this June period to train banks and set them up to achieve interconnectivity with the e-zwich platform.

“Bankers are enrolling their trusted merchants and customers and getting their staff trained and ready,” he said.

Mr Hesse said the banks were hesitant at first but now they were taking the lead from other banks, and the response was growing at a rapid rate.

“I’m very confident we will eventually achieve an 80 per cent bankable population in Ghana,” he said.

The Head of Domestic Operations at Fidelity Bank, Mr Lawrence Lamptey, says it would be difficult to change Ghanaians’ perceptions about technology and their “wait-and-see” attitude, but agrees that e-zwich is the “best possible way of getting the unbanked population into the system”.

Fidelity Bank, a pilot implementer for e-zwich, has already registered approximately 15 merchants and over 100 individual clients to e-zwich. He said it was an easy process to register with e-zwich because all clients had to do was to walk into any bank or financial institution (by the end of June) with a photo ID. He said they would not need previous bank accounts to have an e-zwich card, as the smart card acts as a bank account. Mr Lamptey said merchants were slowly making use of their POS machines and he believed the pilot scheme had been “very successful” so far.

Another pilot implementer of e-zwich, Guaranty Trust Bank, has approximately 30 merchants on board. The Deputy Manager, and Head of the E-Settlemant Unit at GT Bank, Mrs Araba Ofori, said the bank’s aim was to give their customers the convenience of banking anywhere, and e-zwich provided this facility. She said the project had not caught up yet and people are still sceptical, but she was confident the interest would grow after further education and hands-on training.