All is set for the roll out of the Automated Clearing House (ACH) by the middle of November in the Ghana Interbank Payment Systems (GhIPSS) continued effort to modernize the country's payment system.
GhIPSS had earlier in the year indicated it was considering introducing the payment system and officials say the ACH is now ready to go live.
The ACH is primarily an electronic funds transfer system that is increasingly becoming the preferred form of funds collection for organization in developed and emerging economies.
Mr Archie Hesse, General Manager, Business Development, GhIPSS briefed journalists in Accra on Sunday on the ACH process so far.
ACH is considered as the paperless option to the processing of cheques and has a low cost per transaction.
The ACH normally comes in two forms, the Direct Debits and the Direct Credits and much of the activities surrounding the fund transfer take place among the participating banks and GhIPSS, which will act as the Clearing House.
The implementation will begin with the Direct Credit.
With regard to its mode of operation, a customer, be it an individual or organization, will instruct its bank to make payment on its behalf to its clients on a specified date.
On the said date, the paying bank would debit the account of the customer with the instructed amount to be paid out. The financial institution will then create and transmit the transaction through GhIPSS to the recipients' bank.
The receiving bank will then verify the transaction and subsequently credit the account of the client. All of these activities will however take place electronically and in real time.
"It is very useful for the payment of mortgages, or hire purchase and utility bills, because you will not need to issue post dated cheques or trip every time to make this payment. One instruction will ensure that this payment is effected regularly," Mr Hesse said.
"The beauty of the ACH is that it is electronic and it therefore takes away all the paper work. For companies who offer credit facilities and have to contend with thousands of cheques every month, the ACH will be a great relief," he said.
Organizations can also use the system to make huge regular payments such as salaries, commissions and dividends in real time.
Experts say the execution of the transaction is exact and safe because it is secured and electronic. It also makes bulk payments faster and more convenient.
The country's banks are also getting ready for this new service which is expected to introduce a lot of efficiency in the financial system.
Experts say various organizations will save a lot of money and time when they sign on to the ACH system because unlike cheques, which now clear in two days, funds paid through the system can be accessed straight away.
Ghana's financial sector has been undergoing a lot of reforms over the years in a bid to make the country the financial hub of West Africa. The ACH is expected to change the payment landscape and create new opportunities for those who explore the system further.
Source: Ghana News Agency
