customers pay a high price

by MMC
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Fintechs, including mobile money, have transformed the banking and financial sector in developing and emerging economies in Africa and beyond. Financial technology (better known as fintech) is used to describe new technology aimed at improving and automating the delivery and use of financial services.

Mobile money in Africa has been led by M-Pesa from Kenya in 2007. Ghana’s MTN MoMo followed in 2009. Mobile money is a paid digital medium of exchange and store of value using mobile money accounts and a mobile phone.

In Ghana, the volume of mobile money transactions increase from 2.85 billion in 2020 to 4.26 billion in 2021, a growth of 48.6 percent. Likewise, the total transaction value increased to GH¢978.32 billion ($87 billion) in 2021 from GH¢571.80 billion ($50 billion) in 2020. according to at the central bank.

Over the past decade, mobile money has expanded beyond sending and receiving money to several other services, including access to microcredit. Mobile money accounts are now seamlessly linked to bank accounts.

The fintech boom has brought clear benefits to a number of African countries, particularly in Africa. promote financial inclusion. But there has not been a sufficiently critical debate about who actually benefits from the growth of digital finance.

What exactly is the political economy of fintech-led financial inclusion in Ghana and across Africa? How does it play out in the mobile money sector in Ghana? And to what extent do the results in Ghana reflect broader debates about global financial capitalism?

I am a Research associate and doctoral student at the Africa Multiple Cluster, currently studying the political economy of money and finance in Ghana. In a recently published article paper Based on my research, I examine whether or not increased access to financial services through the provision of mobile money services has helped poor people. My findings raise serious concerns about the current state of digital finance in Ghana.

In particular, I found that they were accompanied by higher customer debt due to digital microcredits, high and multiple transaction costs, excessive taxation due to a recently introduced tax and a prevalence dormant accounts.

My research shows that far from ending poverty, financial inclusion has opened new frontiers to exploitation. This is particularly true for poor and working-class Ghanaians. Many of the issues identified in my research were raised by Ghanaians using mobile money banking services. But their complaints were ignored. It is time for this to change and their concerns to be taken seriously.


My study relied on two sources of data. One of them concerned central bank payment systems data (2012-2021). I also conducted 42 interviews with 32 mobile money customers and 10 mobile money agents in seven regions across the country.

My research revealed a number of problems.

First, digital loans, for example, generally represent small amounts. They are therefore incapable of supporting social entrepreneurship. However, they benefit from significant interest rates (6.9% on average) over a 30-day repayment period. The result is that borrowers have to juggle debts, borrowing from one subscriber to pay off others and simply buying time. Of course, most borrowers are unable to “buy enough time” before defaulting and falling into a debt trap that can lead to other problems. As one person said:

I owe them for so many months. My brother, I am a graduate but as you know there are no opportunities. Only thing is I bet, maybe I’ll win big so I can pay them

Second, transactions are expensive. Indeed, there are several fees for transfers and withdrawals ranging from 1% and 5%.

Third, a recently introduced tax has further increased costs. The government has established a electronic transaction tax in 2022.

The way the tax works is this: as the transaction amount increases, subscribers can pay up to twice or more the initial transaction fee.

Learn more:
Quality of mobile money services: what is important to customers in Ghana

Users have took up arms.

As we said:

How can we tax the same money several times? I work, and at the end of the month I receive a salary that I have already paid taxes on and when I send part of it to my mother in the village, you will tax it again. Imagine she wants to send some of it to another parent and you tax her again.

Wider issues

The problems identified by users of mobile money services are not the only challenges facing the sector.

The main ones include:

  • Regulation: There is insufficient regulation on the pricing of digital financial services. Existing legal requirements in Ghana, do not impose limits on digital transaction fees. These regulations must be expanded to limit the amount fintechs can charge for money transfers and withdrawals as well as interest on microcredits.

  • Customer complaints about multiple transaction fees are ignored by the government.

  • Around 50% of registered mobile money accounts stay asleep as subscribers resort to alternative methods of transferring money to try to avoid transaction costs and debt. This has increased the cost burden on both businesses and the government, which is struggling to recover taxes and loans owed on these accounts.

Finally, I conclude in my article that although fintech has improved the ease and speed of financial transactions, it has nevertheless given rise to a series of new problems. This notably exposed subscribers to debt as well as exorbitant transaction costs. These results are not accidental. I argue that the deployment of mobile money in Ghana must be seen as part of global processes opening new frontiers for global digital financial capitalism.

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