Ghana: Guidelines for inward remittance services by payment service providers

Remittances are a significant source of external financing and major contributor to national income. Many Ghanaian families depend on remittances from relations living abroad to cater for various expenses including education, health, rent, housekeeping and utilities. Ghanaians in the diaspora also send money home to fund the construction of residential and/or commercial buildings. Remittances therefore contribute to the economic well-being of Ghanaians.

Over the years, Money Transfer Operators (MTOs) and banking agents have facilitated funds transfer from abroad to beneficiaries in Ghana, which are accessed largely through banking halls. Mobile money and other digital channels which have been made available by payment service providers are now providing extensive, affordable, convenient and flexible alternative means for accessing remittances by beneficiaries.

In furtherance of its commitment to creating an enabling environment for remittances without risking stability of the financial system, the Bank of Ghana publishes this Guideline for Dedicated Electronic Money Issuers (DEMIs) and Enhanced Payment Service Providers (EPSPs) that intend to partner with MTOs to terminate inward remittances.

Preamble

Pursuant to Section 4(1)(e) of the Bank of Ghana Act, 2002 (Act 612) as amended, Section 2(3) of the Foreign Exchange Act, 2006 (Act 723) and Section 10(2) (i) of the Payment Systems and Services Act, 2019 (Act 987), the Bank of Ghana hereby issues these Guidelines for the regulation of inward money transfer services provided by DEMIs and EPSPs in partnership with MTOs.

Scope and Applicability

These Guidelines cover inward international remittance services provided by DEMIs and EPSPs in partnership with MTOs that are terminated into beneficiaries’ bank accounts, mobile money wallets and any other electronic account or wallet approved by the Bank of Ghana, and applies to the following entities:

1. Dedicated Electronic Money Issuers
2. Enhanced Payment Service Providers

Objectives

These Guidelines seek to:

1. provide a framework to guide DEMIs and EPSPs in partnering with MTOs to deliver inward remittance services to Beneficiaries;
2. stipulate the minimum standards and requirements for providing inward remittance services;
3. provide competitive market conditions for the inward remittance industry through the use of innovative digital payment channels;
4. ensure adherence to Anti-Money Laundering/Combatting the Financing of Terrorism (AML/CFT) Law and Guidelines; and
5. promote compliance with consumer protection and recourse mechanisms.

Application for Inward Remittance Services

A DEMI or an EPSP regulated under the Payment Systems and Services Act, 2019 (Act 987) may make an application for the provision of inward remittance services: The application to partner with an MTO to provide inward remittance services shall be made to the Head of the FinTech and Innovation Office of the Bank of Ghana and shall be accompanied by the following information:

1. a copy of the board resolution to provide inward remittance services in partnership with MTOs;
2. name, registered address and principal location of the MTO with whom the money transfer service will be conducted;
3. details of operations of the partner MTO including but not limited to:
4. The most recent three (3) year audited financial accounts
5. Shareholding structure

iii. Company structure

1. Directors’ profile (identification, address, etc.)
2. Confirmation of MTO’s bank address

(d) notarised copy of regulatory approval of the partner MTO;

(e) fully executed Service Level Agreement with the MTO;

(f) fully executed settlement Bank Agreement consistent with the requirements in Foreign Exchange Act, 2006 (Act 723);

(g) service design, including end-to-end transaction flows involving all parties;

(h) AML/CFT policies of both the MTO and applicant including details of how the same will be monitored to ensure compliance and latest external AML/CFT audit assessment;

(i) service risk management framework; and

(j) evidence of implemented transaction monitoring and fraud reporting tools.

(k) ICT architecture highlighting security and control for the remittance business and any relevant policy.

The Bank of Ghana may – within ninety (90) days following receipt of a complete application or where further information has been required – after receipt of the information, grant or refuse the application.

Eligible Money Transfer Operators

A DEMI or EPSP which seeks to partner an MTO for the provision of inward remittance services shall ensure that the partner MTO(s):

1. a) is a registered entity and licenced by a competent authority in its country of registration to carry out international money transfer services;
2. b) directors or shareholders;
3. have not been the subject of, or received notice or any proceedings or investigations of a disciplinary, civil or criminal nature, or has no adverse findings against it including but not limited to illegal conduct, inappropriate business practices, financial loss due to dishonesty, incompetence, malpractice; or is involved in business practices which are deceitful, oppressive or otherwise improper (whether unlawful or not); or
4. Have not been a director of, or directly concerned in the management of any licenced institutions, the licence of which has been revoked;
5. c) country of registration and issuance of licence shall be one which implements and enforces AML/CFT frameworks in line with Financial Action Task Force (FATF) recommendations, and must not have come under adverse findings from mutual evaluation report or cited for AML/CFT infringements; and
6. d) is well established in international money transfer business with a track record of operations in regulated markets including but not limited to the following:
7. Years of operation
8. Volume and value of transactions

iii. Number of countries of operation

1. Number of customers served
2. External AML/CFT assessment
3. e) Has adequate data protection policies in place and in compliance with international best practices

Settlement account

7.1 A DEMI or EPSP shall have designated accounts for remittance settlement domiciled with universal bank(s) only.

(a) These accounts shall be:

1. Remittance inflow settlement account
2. Local settlement account

(b) The accounts in (a) above shall be operationally distinct from all other accounts held by the DEMI or EPSP

(c) Any residual balance in the remittance inflow settlement account shall be moved into an operational account of the DEMI or EPSP after reconciliation of the settlement accounts. (Shall be converted into cedi at the same rate)

7.2 (a) All disbursements shall be from the Local Settlement Account

(b) The Local Settlement Account shall only be funded from the Remittance Inflow account, except where the DEMI or EPSP has entered into a funding arrangement with the settlement bank for the purpose of disbursement to beneficiaries. Repayment of the facility shall be from the Local Settlement Account upon liquidating funds from the Remittance Inflow Settlement Account.