The International Finance Corporation (IFC) has stressed the need for banks in Liberia to work together and develop a strategy for a national digital payment system.
IFC senior financial sector specialist and consultant, Charles Niehaus, said in order for banks to work together in a more harmonious way, they will need to steadily advance the digital payment transaction system. This, he believes, would help boom the country’s economy.
Niehaus spoke on Tuesday, January 24, at the opening of a two-day market-level workshop on the business model of the national payment systems and the functioning of the Payments Council. He is serving as a facilitator at the event.
The workshop, which is being organized by the IFC in partnership with the Central Bank of Liberia, brought together scores of participants from key financial institutions including the Liberia Bank for Development and Investment (LBDI), United Bank for Africa (UBA), SIB, Ecobank, Citi Trust Bank, and Access Bank.
Others are Lonestar Cell MTN, LRA, the Liberia Chamber of Commerce, the World Bank, and Activa Insurance Company, among others.
The initiative is being supported by the Swedish government.
The national payment systems are the conduits through which buyers and sellers of financial products and services make transactions and are an important component of a country's financial system.
Global financial liberalization and advancements in information technology have enabled significant updates to the architecture of large-value retail and securities payment systems and, according to Niehaus, Liberia must take advantage of these.
Niehaus indicated that the systems are vital to the integrity of the global financial system. “Technology and globalization have facilitated the rapid growth of systems for processing noncash electronic transfers between parties located anywhere in the world,” he said. “So, the workshop is basically how all the participants can work together and achieve their goals."
Niehaus further added that a country's payment systems are the financial technology infrastructure that allows commercial and financial transactions to operate efficiently and unimpeded.
He told the participants that there is a lot of research that has been done by IFC on digitization. According to Niehaus, every 10% increase in electronic transactions increases the country's GDP by about half.
"So, as soon as you start digitizing cash, the velocity of the money will stop going through the ecosystem, and we will have a cashless economy," Niehaus urged. "Work together and create a strategy for the digitization of payment transactions in Liberia."
Earlier in his welcome remarks, Marcus N. Davis, Deputy Director for Payment Systems at the Central Bank of Liberia, said the workshop is part of several engagements by the IFC and banks to inform the public about the national payment system of Liberia.
"So, I want to officially welcome you to the market-level workshop on the business model of the National Payment Systems and the functioning of the Payment Council," he said.
Over the past decade, Davis stated, the CBL has invested significantly in the payment system space, and as part of that intervention, the IFC conducted an assessment of the Automated Clearing House (ACH) operations in Liberia in September 2022.
Gibson Kollie, head of consumer banking at Ecobank Liberia, lauded the organizers for such an informative workshop that will drive the country to be digitized.
According to him, the workshop will also help boost the country's economy and help increase the volume of transactions as well as reduce the cost of transactions.
Kollie, who is also a participant, said the ongoing market-level workshop on the business models of the national payment systems and the functioning of the Payments Council is intended to help customers easily transact through the platform.
Meanwhile, the ongoing workshop is expected to end today, January 25, 2023, at a resort in Monrovia with findings from IFC of the Automated Clearing House (ACH) scoping mission.
An ACH is a computer-based electronic network for processing transactions, usually domestic low-value payments, between participating financial institutions. It may support both credit transfers and direct debits.