Introduction
In August 2021, the Bank of Ghana (BoG) issued new guidelines for the domestic processing of card transactions with payment cards issued in Ghana. Among the causes of low levels of adoption and use of cards, the Central Bank identified the cost of transactions as a contributor (attributable largely to offshore processing of card transactions), which the guidelines seek to address.
The objectives of the guidelines are to:
- require the localization of the processing of payment card transactions in Ghana with payment cards issued in Ghana;
- provide a framework for licensing and regulation of payment cards processing; and
- provide an enabling environment for payment card processing and usage in Ghana.
The guidelines require international card schemes to operate locally, with payment card transactions processed domestically and charged in Ghana cedis. To operate locally, international card schemes can opt for either one of the following:
- incorporate a Ghanaian entity and apply to be licensed as Enhanced Payment Service Providers (EPSPs) in accordance with Act 987; or
- partner with existing EPSPs, or a Payment Service Provider (PSP) Scheme or any other entity designated by BoG as a payment system.
An EPSP, PSP Scheme or Designated Payment System which intends to partner an international card scheme to process domestic payment card transactions will be required to obtain approval from BoG, and comply with a list of requirements set out in the guidelines including having a PCI DSS certification (Level 1), implementing fraud monitoring tools, systems and reporting applications, instituting anti-money laundering compliance programmes, and implementing systems to ensure the protection of data and its integrity, as per the Data Protection Act, 2012 and international best practices.
Significance of the Guidelines in the PSP Ecosystem
The guidelines have a potential effect of expanding the permissible activities of EPSPs beyond card processing to include switching and routing of payment transactions and instructions. Licensed PSPs could also see an expansion of the scope of business, owing to the partnerships proposed in the guidelines.
International card schemes that choose to be licensed in Ghana would be licensed as EPSPs, and offer permissible activities of PSP Schemes.
It is envisaged that these guidelines would reduce the cost of transacting with payment cards issued in Ghana, for users within the country.
With the fast growth of the payments ecosystem, together with the uncertainty faced by regulators across the globe in trying to keep up with technological advancements, it is worth mentioning that the Guidelines for Domestic Processing of Payment Card Transactions with Payment Cards Issued in Ghana is a step in the right direction.