Ghana: Bank of Ghana Directs Financial Institutions to Pause Remittance Partnerships with Taptap Send

The Bank of Ghana (BoG) has instructed all financial institutions, including commercial banks, Dedicated Electronic Money Issuers, and Enhanced Payment Service Providers, to immediately suspend their remittance termination partnerships with global remittance provider Taptap Send. The directive, issued through a formal letter to these institutions as well as the Ghana Interbank Payment and Settlement System (GhIPSS), took effect on November 8, 2024, and will remain in force for one month.

The BoG clarified that the suspension was prompted by Taptap Send’s operations of a Cedi Remittance Wallet, which the central bank identified as a violation of Ghana’s Foreign Exchange Act. According to the BoG, the setup breached current guidelines for inward remittance services. Specifically, the Foreign Exchange Act mandates that foreign currencies be deposited in accounts held by banks and other licensed institutions in Ghana, after which the equivalent in cedis is transferred to the recipient within the country.

Citing the Foreign Exchange Act, the BoG noted that engaging in foreign exchange transactions requires a proper license, and unlicensed dealings are prohibited. The Act explicitly states: “A person shall not engage in the business of dealing in foreign exchange without a license issued under this Act.”

BoG’s Warning to Financial Institutions

In its communication, the BoG also issued a strong warning to financial institutions, stating that any institution found to be violating foreign exchange regulations would face severe penalties. The central bank hopes this directive will reinforce compliance with Ghana’s foreign exchange laws and serve as a reminder of the importance of strict adherence to regulatory guidelines within the financial sector.

Taptap Send’s Growing Presence in Ghana’s Remittance Market

Taptap Send has quickly gained popularity among Ghanaians, offering competitive rates and a user-friendly mobile-based platform that has made it a preferred choice for many who remit funds to Ghana. The app provides a cost-effective solution for international money transfers, appealing to users seeking lower fees compared to other providers.

Backed by prominent investors such as Reid Hoffman, the Omidyar Network, and Helios, Taptap Send has been described as one of the fastest-growing mobile remittance services globally. The company employs top-tier talent from industry-leading tech and consulting firms, including Twitter, Yahoo, Uber, Amazon, McKinsey, Bain & Co., Deloitte, KPMG, Cravath, and Vodafone.

The Bank of Ghana’s decision to temporarily suspend Taptap Send’s partnerships emphasizes the need for all financial service providers to rigorously observe Ghana’s foreign exchange regulations. This pause also serves as a critical reminder to the remittance industry of the central bank’s commitment to safeguarding compliance and upholding regulatory standards.