Card Schemes with African Origins should be given Priority by Regulators-Paul Jacquaye- CEO, Clydestone



Paul Jacquaye is a Serial Entrepreneur, always seeking challenging opportunities’ as well as pioneering roles, to create new or grow businesses with the aim of creating employment and wealth. Paul has been in the ICT industry for the  25 years pioneering innovative ideas and business in the Ghanaian Payment Industry ranging from Transaction Switching and Cheque Codeline Clearing. 

He is currently the CEO of Clydestone Ghana Ltd, a leading provider of payments systems in Ghana. Clydestone under the G-switch (Global Switch) brand offers a range of innovative products to the financial sector in Ghana and Africa.

What is the role of integrated e-payment system in boosting cross-border trades in Africa? 

As you are aware, most of the transactions in Africa are cash based. This can be attributed to the low penetration of financial services to the masses. The adoption of bank accounts has lagged behind  that of mobile telephony. There is a need for governments to work with the private sector to promote “financial inclusion”, which is the latest buzzword in use, to bank the populace. The mobile telephony providers can propel this drive; however, the jostling for position and relevance in this regard is slowing down penetration.

This is where regulation, supervision and ownership need clarity and direction. Whether it is bank-led or mobile-company led approach should be adopted. With different Central Banks adopting different regulatory regimes for mobile banking, it would be a matter of time before the right model is adopted. The failure of Mpesa to flourish in other markets apart from Kenya is a clear example. The mistrust between the banks and mobile companies is another factor.

Who will own the customer? The recent development in Kenya is rather interesting with Equity Banks acquisition of a mobile license; there are   very interesting times ahead. Eventually, l believe the consumer will benefit in the long run. Once financial penetration is achieved,  integration will become more relevant and can help propel growth of African economies as more money will be held in the banking system and movement of people and goods will be much more fluid..



What role can independent payment schemes, processors and switches play in the integration of e-payment systems in Africa? 

Independent providers of payment systems have a major role to play. The only problem is that regulators are of the view that they must have a monopoly in the payment systems space. Private sector-led growth is more sustainable in the long term. I believe that the regulators should create the enabling environment and supervision, which will allow independent players in the industry to flourish. The advent of National Switches across the region is laudable; however, they must work hand in hand with the independent providers if we are to see exponential growth over time.  Card schemes with African origins must complement the foreign ones with priority given to local schemes to enable them grow.

Your company has been in the forefront of integration of payment infrastructure across Africa by interconnecting with Interswitch in Nigeria and Kenswitch in Kenya. What are your experiences, challenges and prospects? 

Our integration of G-switch to Interswitch and Kenswitch has been exciting. I see this as a major milestone in the African payment industry. Private switch provider achieving interoperability and convenience for cardholders from Ghana, Nigeria and Kenya.  I believe that we have led the way for cooperation amongst Africans for the benefit of Africans. We hope we can bring more participants in the African payment space to join the trio. This in long run will provide cheaper access to financial services and intermediation.

The initial objectives of our interconnection to both switches are being achieved. However, if we can come together to launch one scheme card to operate in all countries, that will be awesome. The benefits will be for all the participants and cardholders alike.

World Bank is promoting the development of national switches across Africa. Is this not a threat to the growth and development of independent e-payment firms? What roles should national switches play in Africa’s e-payment integration?

The World Bank’s project is laudable. The Bank expects various governments to establish the necessary payment systems infrastructure that will enable interoperability. I do believe that this will go a long way to aid the private providers to ride on this and offer complimentary services. The national switches should therefore ensure that their role should be that of enablers, rather than competitors.

The English speaking West Africa countries have recorded little or no success in the integration of the regional e-payment platforms compare to their Francophone counterpart. What is responsible for this and what is the way forward?

I think this has to do with harmonization. As you are aware, the Francophone countries have a common currency and this has worked in their favour. Settlement of transactions are  therefore simple and straightforward. The English speaking countries have different currencies and this has been a major deterrent. The plan to introduce the common currency, the ECU, has not been achieved. I believe if the introduction of the ECU can quickened then they can achieve their aims in the medium term.

How is China Union Pay acquiring doing on your network? Can you benchmark the transaction performance in Kenya and Ghana? 

Union Pay transactions are growing significantly. We are seeing 100% growth year on year and this is very encouraging. When we started acquiring UnionPay transactions in 2009, UnionPay had issued just over 2.1 billion cards. However, as at June 2014 the figure is over 4 billion. We expect to see more growth in acquiring as we sign on more banks for acquiring. We are also working with banks for issuing. With the formation of Union Pay International, Clydestone is now a Principal Acquiring Member and Third Party Service Provider for Switching/Gateway Services, Systems Operation and Terminal Operation for Union Pay Card Issuance and Acquiring. Transactions in Ghana are much higher than Kenya. We attribute this to certain factors of interoperability of devices, which we are resolving. We expect to see significant growth in Kenya in the very near future.

Russia has threatened to promote a rival card association to tackle VISA and MasterCard oligopoly. Which way for Africa? 

The way forward will be the integration of national and private sector switches across the continent. The national switches in collaboration with other private sector providers must also regulate switching for local currency transactions. The international card schemes should only process cross-border scheme transactions.  Therefore, it is paramount that all local cards must be controlled and switched locally and not internationally. Local cheques and electronic clearinghouse transactions are processed locally, so l believe this should be extended to card transactions. Russia is late compared to what UnionPay and RuPay India, for example, have achieved. However, l am of the view that they can start now.

 http://www.financialtechnologyafrica.com/smart-executives/1741/card-schemes-with-african-origins-should-be-given-priority-by-regulators-paul-jacquaye-ceo-clydestone/