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Secure Transactions News

E-Zwich cards ready in Ghana

Thursday 12 June 2008

Ghana Commercial Bank, Stanbic Bank, Agricultural Development Bank the National Investment Bank, SG-SSB, Bank of Baroda and BSIC Ghana Limited are also in the process to start issuing the biometric smartcard and the POS devices that is expected to attract the ‘under-banked’ and ‘un-banked’ population to save their monies with banks or financial institutions.

So far, about 100 large and small-scale companies have already received POS terminals. This means POS devices have been deployed in market places, banks, supermarkets and government payment centers. The objective of the project is to bring the unbanked and underbanked into the banking system, to facilitate access to banks, and transfer of money, and also remove the cumbersome and insecure processes of using cash.

The E-Zwich system will also allow smartcard holders to spend and settle various transactions online and offline since it is a new secure way of paying for goods and services based on biometric fingerprint identification. Users will be able to load funds on their E-Zwich card by paying in cash at any licensed financial institution e.g. bank, rural bank and savings and loans company, money transfer institution or their authorized agents (e.g. Ghana Post). And the government encourages employers to pay wages and salaries to employees' card’s unique serial number. All e-Zwich transactions will be authenticated through cardholder's fingerprints on e-Zwich ATMs or POS terminals. During registration and enrolment, all 10 fingerprints are taken. This way, users will be able to use another finger if one is not recognized.  However, one finger can be selected as a “panic button”, should criminals target the person. When the “panic button” is used, it automatically drains all the cash in the account temporarily, leaving only a pre-set amount of cash with which to appease the criminals.

As transactions are protected by biometrics, the balance of a lost card is not lost. In case of card loss, E-Zwich promises to issue a new card with the on-card balance restored within 48 hours.

As of now, out of a population of over 22 million in Ghana, only 800,000 people have bank accounts. Ghana Interbank Payment and Settlement Systems Limited (GhIPSS) has an aggressive action plan for E-Zwich adoption: salaried workers are expected to receive their salaries through the e-Zwich payment system before December this year. In addition, pensioners, churches, Controller and Accountant General’s Department (CAGD), Customs Excise and Preventive Service (CEPS), Electricity Company of Ghana (ECG), rural banks, savings and loans companies and banks would become part of the e-Zwich system. Ghana fixed-line infrastructure is generally unreliable. In addition, it only has about five million cellular phones in the entire country.

The next step is for banks to adapt their ATMs to the Universal Electronic Payment System (UEPS) mode by June this year, to adjust it to the new system. Then, by September this year, mobile banking will become effective after the UEPS had become the operational system in the various ATMs.

E-Zwich is based on Net1 UEPS. Net1 deal encompasses all hardware and software, both back- and front-office solutions – including a national disaster recovery site – and will see more than three million cards and 10 000 point-of-sale devices being rolled out by the end of the year. The contract includes a five-year maintenance agreement and the project has already been piloted at five of Ghana's commercial banks. The total amount of Net1 contract is ZAR 243 million (EUR 19.7 million) (cf. SI #08-21)

Net1 has been awarded a contract to do a similar rollout to the one in Ghana in Iraq, where it aims to supply four million smart cards in its first year there (cf. SI #08-10). In addition, the company wants to introduce phone banking in Ghana as the smart cards that are currently used are already using SIM chips. This would mean individuals' cellphones would become point-of-sale devices and their bank account would be based on their phone.

Net1 is a South African provider of smart card technologies and systems that create a secure and affordable transacting channel between formal businesses and the “un-banked” and “under-banked” populations of developing countries who have no or limited access to traditional banking facilities. Net1's UEPS (Universal Electronic Payment System) that makes use of its patented FTS (Funds Transfer System) methodology enables customers to effect transactions “off-line” in underdeveloped areas where traditional financial institutions and their services have limited penetration or are otherwise unavailable due to the lack of, or limited branch, Automated Teller Machines (or “ATM”), POS, support and communications infrastructures. Net1 revenue was US$ 224 million (EUR 144 million) for fiscal year ending on June 30, 2007, a 14% increase over the previous year, and its net income for the same period reached US$ 63.7 million (EUR 41.0 million), an 8% increase over the previous year.