Wikimedia Commons, CC BY-SA
Cell cash — a expertise that permits monetary transactions by cell phones with no checking account — is driving monetary inclusion, particularly in growing international locations. It provides extra folks an opportunity to make use of monetary services and products.
In Ghana, there’s a coverage to encourage using cellular cash and scale back the circulate of money. And cellular cash has proved fashionable due to its benefits.
Individuals can switch cash or make funds wherever they’re, in a easy, quick, handy and reasonably priced manner. Cell cash has improved the effectivity of transactions and initiated some adjustments in conventional banking within the nation. By 2017, Ghana had over 11 million energetic cellular cash accounts.
However in current occasions, incidents of cellular cash fraud have elevated. Statistics from the cybercrime unit of the Ghana Police Service confirmed over 300 reported circumstances in 2019.
Because of this, MTN, the largest cellular cash operator in Ghana, has launched a brand new coverage . It requires proof of id (ID) earlier than a buyer can withdraw money. Legitimate types of proof are a driver’s licence, voter’s ID, passport, Social Safety and Nationwide Insurance coverage Belief ID, Nationwide Well being Insurance coverage card or Ghana card (nationwide ID). All cellular cash brokers should choose the ID sort and enter the ID card quantity offered by the client earlier than finishing the transaction.
There are two issues with this: it excludes folks from monetary companies and it encourages using money. There are higher methods to handle fraud.
The ID downside
Based on Ghana’s Nationwide Identification Authority, solely about 15.5 million out of the inhabitants of 30 million have been registered with formal ID. The brand new coverage doubtlessly excludes these people from utilizing cellular cash.
Analysis reveals that individuals with out formal ID are usually the poor, dwelling in distant villages, the place cellular cash is their solely entry to monetary companies. They depend on cellular cash brokers for remittances.
In Ghana, cellular cash is turning into the favorite channel for monetary transactions and this new coverage implies that folks want to hold IDs each time. It’s tough to acquire and exchange IDs in Ghana due to bureaucratic processes. So this coverage might create inconvenience, which might discourage clients from utilizing cellular cash.
I’ve accomplished analysis on what influences behaviour associated to monetary applied sciences. Certainly one of my findings is that persons are extra open to utilizing cellular cash after they count on the trouble of doing so to be small. On this foundation, I imagine they won’t use cellular cash if there are hindrances like always offering ID. Confronted with this effort, they might revert to using money — thereby derailing Ghana’s monetary inclusion progress. This new rule about presenting an ID has good intentions however may produce negative effects.
The brand new coverage additionally encourages the conversion of cellular cash to money, which works in opposition to the federal government’s agenda of discouraging money. The federal government encourages digital cost to widen the tax web and to struggle corruption and theft. Cell cash insurance policies ought to assist this agenda as an alternative of undermining it.
Offering ID earlier than withdrawals won’t remedy cellular cash fraud. Fraudsters can simply use faux IDs for transactions due to the restricted integration of all nationwide databases. Additionally, IDs in Ghana usually are not correctly linked to residential addresses, so it is going to be tough to hint perpetrators even when cellular cash fraud is detected.
Slightly, focus needs to be on using rising applied sciences like synthetic intelligence and machine studying to develop algorithms that may mechanically detect, flag, and briefly block potential fraudulent transactions for additional investigation.
Equally, there’s the choice of two-factor authentication. This permits folks to make use of authentication apps or textual content messages to validate transactions earlier than they’re authorised. It provides folks one other degree of safety along with private identification numbers to struggle fraud.
One other resolution out there to struggle fraud is to remove charges for inter-mobile cash transfers. This can encourage e-funds to stay in circulation, which makes it simpler to hint fraudulent funds and uncover fraud networks. Fraudulent funds that aren’t withdrawn will be simply traced.
Ghana additionally has a common QR code cost expertise to encourage cashless transactions. MTN must work with the Ghana Interbank Fee and Settlement Methods, retailers, petty merchants, drivers and others to roll out the expertise all through the nation. This is able to allow extra folks to make use of cellular cash to pay for each day actions.
Lastly, extra may very well be accomplished to enhance folks’s consciousness of how cellular cash fraud works and will be prevented. And perpetrators needs to be prosecuted.
Utilizing this coverage of “no ID, no cashout” will solely derail the monetary inclusion beneficial properties and Ghana’s cashless agenda. Cell cash operators ought to use superior applied sciences to proactively foil fraudulent transactions as an alternative of counting on handbook interventions.
PK Senyo receives funding from Innovate UK, ESRC, and UKRI.