National Payment System in Ghana

Issuer
Bank of Ghana

System Description
National Biometric Payment System

Business Sectors
Retail, Money Transfers, Salary Payments, Utility Payments, Mobile Banking, Loans, Savings

Background
In April 2008, Net 1 launched the first nationwide roll-out of biometric-based smart card technology to financial institutions in Ghana. The adoption of the national payment initiative was driven by the desire of Ghana’s president, John Agyekum Kufuor, to include the majority of the 22 million Ghanaians in the financial services net. Presently, only 800,000 Ghanaians are banked. In order to quickly establish the necessary nationwide acceptance infrastructure, the Bank of Ghana (Ghana’s central bank) issued a directive that all banks are required to link their ATMs and POS terminals to the National Switch, the E-Zwich, by 31st March 2008. Banks with existing switches were expected to be made compatible with the National Switch by 1st July 2008, while banks without switches/ATMs/POS terminals were expected to integrate their payment terminals directly into the National Switch.

E-Zwich is based on smart cards utilizing biometric fingerprint authentication. The card constitutes an individual’s entire bank account, and transactions can be done either online or offline over any of the banks’ platforms at any time. Some of the transactions that are presently enabled include card-to-card transfers, card-to-bank transfers, cash withdrawals at biometric-enabled ATMs, as well as card-to-person transfers. The latter is a convenient and secure money transfer application that involves a cardholder paying cash to a recipient w/o a card for whom a virtual bank account and a pay-out code is created. The recipient can then go to any bank in the country and provide the code in order to receive the cash.The E-Zwich platform enables electronic payments to all Ghanaians whether banked, unbanked or underbanked because it is accessible even in the remotest parts of the country, where electricity and telecommunication services might be unavailable or unreliable.