The Bank of Ghana (BoG) has ordered all financial institutions—including commercial banks, electronic money issuers, and enhanced payment service providers—to suspend their Remittance Termination Partnership with global remittance platform Taptap Send. This directive, issued in a letter to all banks, Ghana Interbank Payment and Settlement System (GhIPSS), and relevant payment service providers, took effect on November 8, 2024, and will remain in place for one month.
The central bank’s decision stems from Taptap Send’s operation of a Cedi Remittance Wallet, which the BoG argues violates Ghana’s Foreign Exchange Act. According to the BoG, the platform’s activities breach both the Act and updated regulations governing inward remittance services in the country.
BoG Cites Legal Breaches
The Foreign Exchange Act mandates that foreign currency remittances must be deposited into a licensed bank or financial institution in Ghana, and the cedi equivalent is then credited to the recipient’s account. The BoG’s letter emphasized that Taptap Send’s operations violated this provision by circumventing the required process for converting and depositing foreign currency.
Section 3 (1) of the Foreign Exchange Act also states that no entity may engage in foreign exchange dealings without being licensed under the Act. The Bank of Ghana has issued a stern warning, stating that any institution found violating these laws will face severe penalties.
Bank of Ghana’s Warning to Financial Institutions
The BoG has further cautioned other financial entities in the remittance space, signaling that any breach of the Foreign Exchange Act will result in strict enforcement measures. The central bank hopes that this suspension will act as a deterrent, encouraging full compliance with the country’s foreign exchange regulations.
Taptap Send’s Popularity in Ghana
Taptap Send, a mobile-based remittance platform, has become increasingly popular among those sending money into Ghana due to its low-cost service and competitive pricing. The app, which allows users to send money internationally at affordable rates, has been described by industry experts as one of the fastest-growing remittance services worldwide.
Backed by investors like Reid Hoffman, the Omidyar Network, and Helios, Taptap Send has attracted top talent from global tech and consulting firms, including Twitter, Uber, Amazon, McKinsey, and Deloitte, contributing to its rapid growth and expansion in the mobile remittance market.
Impact of the Suspension
The BoG’s decision is expected to significantly impact Taptap Send’s operations in Ghana, especially given its growing popularity among remittance users. While the suspension is temporary, it underscores the importance of compliance with Ghana’s foreign exchange regulations, which are designed to protect the local currency and financial ecosystem.
As the suspension progresses, stakeholders in the remittance industry will be closely monitoring how Taptap Send navigates the situation, and whether other platforms will face similar scrutiny from the Bank of Ghana.
