Fintech, an acronym for Financial Technology, refers to the application of technology to improve and mechanize traditional financial processes and services. This includes a range of services like digital wallets, peer-to-peer lending, mobile payments, online banking, and financial management tools.
Fintech, particularly mobile money, has revolutionized banking and finance in developing economies, notably in Africa. Financial technology, or fintech, refers to innovative technologies aiming to enhance and automate the delivery of financial services. The introduction of mobile money, pioneered by Kenya’s M-Pesa in 2007 and followed by Ghana’s MTN MoMo in 2009, has transformed into a pay-as-you-go digital medium of exchange and store of value using mobile money accounts and phones.
In Ghana, mobile money transactions surged from 2.85 billion in 2020 to 4.26 billion in 2021, indicating a 48.6% growth. The total transaction value rose to GH¢ 978.32 billion ($87 billion) in 2021 from GH¢ 571.80 billion ($50 billion) in 2020, as reported by the central bank. Over the past decade, mobile money has evolved beyond basic transactions, now seamlessly connecting with bank accounts and offering additional services, including microcredit.
The fintech boom, while fostering financial inclusion in Africa, prompts critical questions about who truly benefits from digital finance growth. As a Research Associate and PhD candidate studying the political economy of money and finance in Ghana, my recent paper highlights concerns about the impact of increased access to financial services through mobile money. Contrary to expectations, my findings reveal higher customer indebtedness from digital microloans, excessive transaction costs, increased taxation, and a prevalence of dormant accounts.
Far from alleviating poverty, financial inclusion has, in fact, led to new forms of exploitation, particularly affecting poor and working-class Ghanaians. Many issues identified in my research align with complaints raised by mobile money users, suggesting a need for serious consideration of their concerns. Additionally, broader challenges in the sector include insufficient regulation of digital financial service pricing and the high percentage of dormant mobile money accounts, leading to increased costs for corporations and the government struggling to recover owed taxes and loans. To address these issues, there is a pressing need for expanded regulations to limit transaction charges and interest rates on microloans, alongside increased attention to customer complaints and the reactivation of dormant accounts.
Ghana has seen a rise in the creation of quickly expanding fintech businesses in recent years, both domestically and internationally. There are thought to be more than 70 fintech businesses in Ghana. Notably, the Bank of Ghana, the regulatory body, thoroughly assesses these businesses before granting licenses to operate.
Moreover, the scrutinized criteria include robust IT security systems and policies, strong governance structures, and rigorous risk management policies overseen by the Fintech and Innovations Office at the Bank of Ghana.
This period marks an exciting phase for the fintech industry in Ghana due to the stringent regulations that will compel companies to uphold high standards, fostering a landscape where the most secure and innovative fintech firms lead the way.
Outlined below are the top 10 fintech companies in Ghana, each distinguished by its unique features:
- MTN Mobile Money – Momo: A leading fintech platform associated with MTN, offering a range of digital financial services and commanding approximately 89.3% of the mobile financial services (MFS) revenue in Ghana.
- Zeepay – trend setter: Specializing in mobile money interoperability and international remittance, Zeepay secured the position as the second-largest fintech app in terms of MFS revenue in Ghana.
- Hubtel – the fintech with e-commerce services: Providing mobile payment, bulk SMS, and e-commerce solutions, Hubtel aids small and medium enterprises (SMEs) in Ghana by digitizing their payment processes.
- Expresspay – One of Ghana’s premier Fintechs: Offering electronic payment solutions for utility payments, internet subscriptions, and airtime top-ups, Expresspay is recognized for its user-friendly interface and extensive agent network.
- Kowri – the All-In-One app: A comprehensive digital financial app by Sevn Ghana Limited, offering a variety of financial solutions such as money payments, airtime purchase, utility bill payments, and business promotion.
- Finance Plus – focused on financial institutions and loans management: Developed by Cube Robotics, Finance Plus assists credit unions, rural banks, and microfinance institutions in their growth by providing specialized software.
- Ghanapay – the giant in the room: Introduced by Ghana Interbank Payment Settlement Systems Limited (GhIPSS), Ghanapay offers mobile money services with additional banking features, fostering direct relationships with banks and non-bank financial institutions in Ghana.
- Chango – towards crowdfunding: A crowdfunding platform by IT Consortium (ITC), Chango facilitates group-based fundraising for various causes or projects.
- Slydepay – one of the many firsts from Banks: Powered by Stanbic Bank Ghana, Slydepay is an all-in-one mobile application for easy mobile payments, airtime and internet data purchases, and in-store and online transactions.
- Payswitch – enabling financial inclusion for SMEs: Allows businesses to accept payments via multiple channels, including mobile money and cards, offering tailored solutions for the Ghanaian middle class and business community.
Fintechs have firmly established themselves in Ghana, simplifying payments and financial transactions for residents. The companies positioned to lead are those capable of providing a diverse range of financial solutions, anticipating client needs, and navigating the challenges associated with obtaining a fintech license in Ghana.