BoG Encourages Innovation In Digital Payments

Dr. Johnson Asiama

As part of measures to encourage innovation in digital payments, the Bank of Ghana (BoG) will establish a regulatory sandbox.

The purpose of the regulatory sandbox is to allow innovators to test their ideas in a live but controlled environment under the supervision of the bank.

The approach is to encourage innovation and also proactively identify any risk that may be associated with it.

Dr. Johnson Asiama, Second Deputy Governor, BoG made this known at the Ghana Economic Outlook and Business Strategy Conference 2017 held in Accra on the theme, “Unlocking Ghana’s Economic Potential with Mobile Money and Payment Systems.”

He said the bank this year has also commenced the process of adopting regulatory technology referred to as RegTech to identify regulatory requirements of digital payments, facilitate monitoring of compliance and enhance compliance of service providers to regulations.

Dr. Asiama said digital payments offer great potential for financial inclusion, elimination of payroll fraud, improvement in the monetary policy transmission mechanisms and efficiency in payments.

However, he said digital payments can only be an enabler of inclusive growth when the right regulatory environment is in place.

“It is on account of this that the bank is continuously retooling the regulatory environment to incentivise stakeholders to innovate. It is envisaged that the draft Payment Systems and Service Bill, when passed into law, will scale up financial inclusion,” Dr. Asiama said.

He said the law complemented by RegTech and regulatory sandbox will also provide the right conditions for innovation in digital payments.

Payment Systems and Services Bill

Dr. Asiama also revealed that the bank has submitted the “Payment Systems and Services Bill” which is a revision and consolidation of the existing Payment Systems Act 2003, (Act 662) and the Guidelines for Electronic Money Issuers (2015).

The draft Bill, he said, has become necessary on account of the increasing role of communication technology, fintechs, telcos and aggregators in the payments space.

“It is anticipated that the Bill, when passed into law, will provide the necessary legal backing to the bank to support digital payments without risking the stability of the financial system.
“Similarly, as we to continue to rely on fintech solutions in the payment system space, it is important that the appropriate regulatory tools are deployed to enhance regulatory compliance and improve the safety and integrity of payment products,” he said.

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By Cephas Larbi