How instant inter-bank transfers can transform consumer banking

The Ghana Inter-Bank Payments and Settlement System (GhIPSS) is working with commercial banks to introduce instant inter-bank transfer of funds.

Currently, while customers can move funds within two accounts in the same bank or make same or next day direct credits on the Automated Clearing House (ACH), customers of different banks cannot do instant transfers across banks. 

GhIPSS, a subsidiary of the Bank of Ghana which is working to ensure a cashless economy, is working with banks to prepare their switches (automated systems) and integrate into that of GhIPSS to bring the service alive.

Systems of banks should be able to achieve two goals – send and receive transfers. However, the minimum requirement is for all banks to have the capability to receive instant transfers.

“We are at the implementation stage of the Ghana Instant Pay (GIP) service. At our end, we have completed development and we are waiting for banks to complete theirs for us to test and integrate,” the Chief Executive of GhIPSS, Mr Archie Hesse, told the GRAPHIC BUSINESS in an interview on October 23.

Mr Hesse encouraged all banks to complete their development work to enable the instant pay service to go live for customers of banks to benefit from premium pay service.

But GhIPSS is not waiting for all banks to be ready at a go. It is working with a few banks which have shown readiness and commitment to launch the pilot which is expected to attract other banks into the transformational initiative.

Benefits to banks

The instant pay service will significantly add value to the banking industry as customers can instantly move funds to pay bills and resource other accounts in a different bank. 

It will be the first time such a service in Ghana, although it is not new in most of Ghana’s peer economies. The fastest inter-bank transfers in Ghana are next and same day clearing under ACH Direct credit.

Mr Hesse said banks could use the service to differentiate their product offering by adding another service to their bouquets of services.

“Once this is in place, we can then use it to offer the e-bill pay service for wholesalers and this will transform consumer banking in the country,” the CEO said confidently.

This e-bills pay service, which would piggyback on the GIP, will enable wholesalers of cement companies, telcos, fast moving consumer goods producers and others to transfer instant cash to their suppliers to guarantee smooth business relations.

Generally, the instant pay will ensure convenience for customers, improve banks’ float as inward transfers will be received quicker. GB