Traders in some major market centers in Accra have revealed that shoppers have moved away from using mobile money as a payment option and instead prefer using cash since the on-trade tax came into effect. electronic transactions (E-Levy), according to anecdotal evidence collected by the B&FT showed.
According to some of the traders interviewed in Madina, Mallam and Kaneshie markets, most customers prefer not to buy the item if they have to pay or top up their money with mobile money (MoMo), a situation that does not did not exist before. to the introduction of the E-Levy.
According to some traders, this disrupted the flow of trade; thus slowing down business and reducing their turnover.
“I sell cosmetics and do MoMo transactions here in my shop. So if you buy from me, I accept MoMo as payment. But because of the E-Levy, many people have stopped buying with mobile money, which affects sales. So I advise them to withdraw the money from me and pay in cash if they want,” a Madina market trader, who prefers to call himself Ama, told B&FT in an interview.
Another trader, Johnson – a groceries seller at Mallam Market, reiterated that the situation has affected trade as shoppers are unwilling to pay with mobile money if they do not have enough cash on hand. them.
“I accept MoMo, but since the start of E-Levy, some of my customers have refused to pay with MoMo. The few who pay with MoMo do so reluctantly because sometimes the money on them does not It’s not enough to pay for the items they bought; but because they need it, they have to buy,” he said.
Some of the shoppers who spoke to the B&FT confirmed what the merchants had said – saying they weren’t ready to bear the tax burden, hence their reluctance to use the mobile money platform.
At Madina Market, a shopper, Evelyn Borson said, “I’ve lost interest in making huge payments with MoMo, unless the amount is less. I can afford at least 200 GH¢, but beyond that please I won’t”.
Abigail, who was at Kaneshie Market to buy items, said, “As for me, I don’t make any payment with MoMo when it exceeds GH¢100. Let’s say I pay for items worth 150 GH¢, just found a MoMo booth, quickly withdraw the money and make my payment. Or I will pay half with MoMo and pay the rest in cash”.
For some merchants, the disruption to trade flows created by the implementation of E-Levy has led them to consider opening merchant accounts, as the tax is not applied to these accounts.
A fabric seller at Mallam Market, Mama Linda, said she and other wholesalers are opening merchant accounts so they can pay their suppliers through MoMo without incurring direct debit fees.
Even though the Electronic Transactions Levy (E-Levy) only came into effect this month, available data shows that the mobile money platform lost around GH¢10 billion in value between November 2021 and January 2022 – a development that raises serious concerns about the new tax. ability to collect anticipated revenues.
According to the Economic and Financial Data Summary (March 2022) published by the Bank of Ghana, the mobile money platform, which is the largest payment system network in the country – considered the main driver of financial inclusion – saw its transaction value drop to GH¢76.2 billion in January 2021 from the GH¢86.1 billion recorded in November 2021 (the same month it was announced), indicating a decline of 9.9 billion GH¢.
The platform has never seen such a colossal drop in value in the span of two months in a year since its introduction.
Apart from the drop in value on the platform, the total number of transactions also went south as it saw a drop of 24 million in January 2022 compared to November 2021. The number of active agents also saw a drop. by 7,000 during the same period, while active mobile money accounts also decreased by 600,000 during the reporting period.
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