Mobile Money Transaction Restrictions Could Impede Progress Toward A Cash-Lite Economy. - ISSER Warns
The Institute of Statistics, Social, and Economic Research (ISSER) has raised concerns over the potential detrimental effects of the recent restrictions placed on mobile money (MoMo) transactions. ISSER has pointed out that these restrictions may not only hinder the ongoing digitization efforts for micro, small, and medium-sized enterprises (MSMEs) but could also impede progress toward a cash-lite economy.
The Impact on MSMEs
In its press statement, ISSER recognized that the newly proposed rates may have minimal impact on small-value transactions. However, the Institute cautioned that this move could significantly affect micro, small, and medium enterprises that heavily rely on mobile money for their financial transactions. Specifically, ISSER highlighted the potential consequences for traders and farmers operating in rural areas, especially those within the agricultural value chains.
According to ISSER, an increase in mobile money transaction costs could lead to a transfer of these additional expenses to consumers, forming a potential trigger for both food and non-food inflation.
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Ripple Effects on Social Media-Driven E-commerce
ISSER also expressed apprehension about the ripple effects beyond the immediate impact on mobile money transactions. The development of the social media-driven e-commerce ecosystem, which heavily depends on mobile money for payments, may also witness a transfer of the revised charges to consumers. This, according to the Institute, could manifest as increased prices of goods and services presented on various e-commerce platforms.
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Response from MoMo Agents
The joint statement from MoMo agents across Ghana indicates an immediate response to the new restrictions. They have unveiled a temporary measure that limits cash withdrawals to GH¢ 1,000 per transaction starting from December 1.
Challenges Faced by Rural Communities
ISSER emphasized the potential significant impact on neglected and last-mile populations due to these restrictions. The statement shed light on the geographical disparity between mobile money agents and traditional banking facilities, particularly in rural areas. ISSER pointed out that a substantial proportion of rural dwellers, who lack adequate access to ATMs, banks, or microfinance institutions, might be forced to endure high transaction costs or resort to cash transactions, given the limited options available to them.
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