The Bank of Ghana is seriously considering a new directive that will compel banks to use the national switch to process and settle payment card transactions in the country.
According to the Central Bank it has already begun discussions with the banks on the scope of the directive, which will help it to have total control over financial transactions that occur in the country.
Mr. Archie Hesse, the Chief Executive of the Ghana Interbank Payment and Settlement System (GhIPSS) Limited a subsidiary of the Central Bank explained to the B&FT that the present arrangement where the use of international payment cards such VISA and Mastercard on a local account is processed and settled outside the realm of the Central Bank is inappropriate.
He said the processing and settlement of financial transactions borders on national security, which should not fall on the blind side of the regulator.
“Currently, settlement of local transactions via international schemes is done either by a bank or outside (jurisdiction), and that’s what we are working on to ensure that settlement is done within the country and against Central Bank funds.
“If nothing else, the banks should settle their local transactions on the national switch,” he said.
The Central Bank established GhIPSS in 2007 to manage the national switch and other programmes to make payment faster, more accessible and more secure in order to facilitate business transactions.
As of now, many operating banks in the country have issued VISA and Mastercards to their customers to widen access to their accounts and allow for Internet and point of sales transactions.
The cards merely provide the means by which a customer’s linked bank or other accounts can be accessed using an electronic funds transfer and point of sale terminal or ATM across the world.
Mr. Hesse explained that the parameters of the Central Bank’s control will be on payment cards that are issued and used on a local account.
“Visa and Master cards have both local and international flavours, and the local flavour is the one that I am talking about. “When it is a local card against a local account, used in Ghana, it should be switch-processed and settled in Ghana.
“It is a fact that we need to have control over the transactions from cradle to grave. We need to have records. If for example, there are some fraud parameters we need to include in our fraud system; and if it is localised in Ghana, we need to have control over it and at the moment we don’t.
“At the moment when it comes to the processing of VISA cards locally, it goes out of the country which is on our blind side and that I don’t think that is right,” he added.
Source: B&FT
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