CHAPTER I

INTRODUCTION

1.1BACKGROUND OF THE STUDY

E-zwich is the brand name for the common platform (The National Switch) that links the

payment system of all banks, and non-bank financial institutions. An example is the Savings

and Loans companies, credit unions, money transfer institutions and Rural Banks in Ghana.

The E-zwich smart card is a new and very secured way of paying for goods and services

throughout the country based on biometric (finger print) identification. E-zwich allows smart

card holders and merchants to load and spend funds as well as settle various transactions.

Individuals can perform various banking and retail functions using the card. These include

cash withdrawals, payment for goods and services, money transfers and bills payment from

any e-zwich smartcard Point of Sale (POS) or Automated Teller Machine (ATM) across the

country. The e-zwich smartcard is more versatile than the traditional bank issued cards. One

can just walk into any bank, rural bank and Savings and Loans company and get e-zwich

smartcard without having to open an account. The process should take between five and ten

minutes and a photo Identity card (voter’s ID card, driver’s license, passports or school ID

cards) will be required. All clients using the e-zwich for transactions will be authenticated

through one of their finger on the e-zwich Auto Teller Machine or Point of Sale device.

During registration, all ten finger prints are taken. Individuals will be able to use another

finger if one is not recognized.

Precisely, the e-zwich card cannot be used by another person because of the finger print

authentication requirement in case of misplacement when you report to your bank; you will

be re-issued with a new card and your balance on the card restored by a maximum of forty-

eight hours. E-zwich will reject any attempt to utilize your old card even by yourself.

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E-zwich’s uptake has been encouraging, and it is believed that should the project go

according to plan, the dream of the country to become a cashless economy could become a

reality. But, for the project to be successful, a lot more must be done, including financial

education for the largely unbanked population. In fact, branchless banking has a great

potential to extend the distribution of financial services to poor people who are not reached

by traditional bank branch networks; it lowers the cost of delivery, including costs both to

banks of building and maintaining a delivery channel and to customers of accessing services

(e.g. travel or queuing times).

Using agents rather than banks for remote cash transactions will also bring massive cost

reduction to both the bank and the customer. As noted by Consultative Group Action to

Assist the Poor (CGAP), “Banco de Credito in Peru estimates that a cash transaction at a

branch costs abakistan estimates that, I the Orangi slum of Karachi, the setup cost of a bank

branch would be 30 times more than the setup cost per agent, which is about US$1,400.

Monthly running costs average about US$28,000 for a branch, compared with US$300 for an

agent, but also, a much larger share of monthly running costs is variable for an agent than for

a branch”.

1.2 STATEMENT OF THE PROBLEM

The introduction of E-zwich by the Ghana Interbank Payments and Settlements Systems

(GHIPSS) has broadened the scope for branchless banking in the country.  E-zwich is the

brand name for the common platform, the National Switch, that GHIPSS has introduced to

all licensed banks and non-bank financial institutions e.g. savings and loans companies, credit

unions, money transfer institutions, and rural banks in the country, offering electronic

payment facilities.

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In an attempt to solve the problems faced by the financial institutions and the general public

in counting huge sums of money in their transactions and also the lost of money by some

individuals through disaster and other means, has contributed to the introduction of e zwich

smartcard by the Bank of Ghana.

The researcher stands to find out the effect of the smartcard on financial institutions, the

benefits of the card to the general public and why many people have not signed up on the

program.

Hence, the need for a study on the prospects and challenges of the e-zwich smartcard.

1.3 OBJECTIVES OF THE STUDY

The main objectives of the study are;

1. To identify the effects of the e- zwich smartcard on the financial sector.

2. To identify the difficulties and benefits faced by the general public in using the card

3. To determine why most people have not hooked on to the program.

1.4 SIGNIFICANCE OF THE STUDY

The study is significant in the sense that it will enable the researcher bring to the general

public the benefits derive and some challenges faced in using the smartcard and how it will

be addressed by the Bank of Ghana. The study also will help the bank of Ghana as to why

most people have not hooked on the program and the necessary measures will be put in place.

This study when completed will serve as a source of reference to researchers who will like to

engage in further research work or who need information on this same topic or related topics.

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1.5 SCOPE AND LIMITATIONS OF STUDY

The scope of the study is to research on the prospects and challenges of the e-zwich. This

research paper is limited by a number of factors which include time constraints, inadequate

funds and insufficient material sources.

Other comments and statements that have been passed by some financial, non financial

institutions, individuals and the Bank of Ghana will also be taken into consideration. Also

findings and conclusion will be base on the response from the 50 sample size of the general

public as well as response from the sample firms used. The process of obtaining information

from all the various sources may not be achieve due to financial constraints.

1.6 DEFINITION OF TERMS

1. Bank – ‘a business that keeps money for individuals or companies, exchange

currencies, make loans, and offers other financial services’. Encarta dictionaries.

2. Financial Institutions – are generally business enterprises whose primary functions

include receiving sums of money from individuals and organizations and managing

the funds received so as to generate more money to enable them to meet the financial

demands of their depositors or creditors as well as serve as sources of financial

support and others.

3. E-zwich – is the brand name for the common platform, the national switch that links

the payment systems of all licensed banks and non-banks financial institutions.

Bog.gh.com.

4. Prospects – Vision of future, direction faced, possibility of something happening

soon. Encarta dictionary.

4

5. Challenges – ‘invitation to take part in the context, questioning of something, demand

for identification.’ – Encarta dictionary

6. Smart Card – ‘a small plastic card containing a micro chip that can store personal data

such as bank account details used for identification and for payment of purchases.’ –

Encarta dictionaries.

7. Merchants – ‘Somebody who buys and sells goods especially as a whole seller or

internationally.’ – Encarta dictionary.

1.7 ORGANIZATION OF THE CHAPTERS

The study consists of five main chapters. These are;

Chapter 1: this chapter covers the introduction of the study, purpose of the study,

significance of the study, scope and limitations of the study and organization of chapters.

Chapter 2: this chapter presents a review of existing and related literature on the e-zwich

introduced by Bank of Ghana.

Chapter 3: deals with the research methodology. This includes type of research used,

population, sampling method, data collection method and the method of data analysis.

Chapter 4: consists of the presentation, an analysis and discussion of data collected from

administered questionnaires, some financial institutions and individuals.

Chapter 5: It is the final part of this paper. It deals with the summary, conclusion and

recommendations.

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CHAPTER TWO

2.DEFINITION OF SMARTCARDS

A smart card, chip card, or integrated circuit card (ICC), is defined as any pocket-sized

card with embedded integrated circuits which can process information. This implies that it

can receive input which is processed - by way of the ICC applications - and delivered as an

output. There are two broad categories of ICCs. Memory cards contain only non-volatile

memory storage components, and perhaps some specific security logic. Microprocessor cards

contain volatile memory and microprocessor components. The card is made of plastic,

generally PVC, but sometimes ABS. The card may embed a hologram to avoid

counterfeiting. Using smartcards is a popular form of strong authentication for Single Sign-

On within large organizations. (Wikipedia, the free encyclopaedia).

A "smart card" is also characterized as follows:

Dimensions are normally credit card size. The ID-1 of ISO/IEC 7810 standard defines

them as 85.60 × 53.98 mm. Another popular size is ID-000 which is 25 x 15 mm.

Both are .76 mm thick.

Contains a security system - tamper-resistant properties (e.g. a secure

cryptoprocessor, secure file system, human-readable features) and is capable of

providing security services (e.g. confidentiality of information in the memory).

Asset managed by way of a central administration system which interchanges

information and configuration settings with the card through the security system. The

latter includes card hotlisting, updates for application data.

Card data is transferred to the central administration system through card reading

devices, such as ticket readers, ATMs etc. (http://en.wikipedia.org/wiki/Smartcard)

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2.2 TYPES OF SMARTCARDS

2.3 CONTACTLESS SMARTCARD

A second type is the contactless smartcard, in which the chip communicates with the card

reader through RFID induction technology (at data rates of 106 to 848 kbit/s). These cards

require only close proximity to an antenna to complete transaction. They are often used when

transactions must be processed quickly or hands-free, such as on mass transit systems, where

smart cards can be used without even removing them from a wallet.

The standard for contactless smart card communications is ISO/IEC 14443, dated 2001. It

defines two types of contactless cards ("A" and "B"), allows for communications at distances

up to 10 cm. There had been proposals for ISO 14443 types C, D, E and F that have been

rejected by the International Organization for Standardization. An alternative standard for

contactless smart cards is ISO 15693, which allows communications at distances up to 50 cm.

Examples of widely used contactless smart cards are Hong Kong's Octopus card, and Japan

Rail's Suica Card; which predate the ISO/IEC 14443 standard.

A related contactless technology is RFID (radio frequency identification). In certain cases, it

can be used for applications similar to those of contactless smart cards, such as for electronic

toll collection. RFID devices usually do not include writeable memory or microcontroller

processing capability as contactless smart cards often do.

There are dual-interface cards that implement contactless and contact interfaces on a single

card with some shared storage and processing. An example is Porto's multi-application

transport card, called Andante, that uses a chip in contact and contactless (ISO 14443B).

7

Like smart cards with contacts, contactless cards do not have a battery. Instead, they use a

built-in inductor to capture some of the incident radio-frequency interrogation signal, rectify

it, and use it to power the card's electronics. ( Rankl & Effing, 1997.)

2.4 CREDIT CARDS

These are the best known payment cards (classical plastic card):

Visa: Visa Contactless, Quick VSDC - "qVSDC", Visa Wave, MSD, pay Wave

MasterCard: Pay Pass Magstripe, Pay Pass MChip

American Express: Express Pay

Chase: Blink (credit and debit cards)

Roll-outs started in 2005 in USA (Asia and Europe - 2006). Contactless (non PIN)

transactions cover a payment range of ~$5-50. There is an ISO 14443 Pay Pass

implementation. All Pay Pass implementations may be separated on EMV and non EMV.

Non-EMV cards work like magnetic stripe cards. This is a typical card technology in the

USA (Pay Pass Magstripe and VISA MSD). The cards do not control amount remaining. All

payment passes without a PIN and usually in off-line mode. The security level of such a

transaction is no greater than with classical magnetic stripe card transaction.

EMV cards have two interfaces (contact and contactless) and they work as a normal EMV

card via contact interface. Via contactless interface they work almost like an EMV (card

command sequence adopted on contactless features as low power and short transaction time).

( Rankl & Effing, 1997,).

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2.5 CRYPTOGRAPHIC SMARTCARDS

Cryptographic smartcards are often used for single sign-on. Most advanced smartcards are

equipped with specialized cryptographic hardware that let you use algorithms such as RSA

and DSA on board. Today's cryptographic smartcards are also able to generate key pairs on

board, to avoid the risk of having more than one copy of the key (since by design there

usually isn't a way to extract private keys from a smartcard).

Such smartcards are mainly used for digital signature and secure identification, (see

applications section).

The most common way to access cryptographic smartcard functions on a computer is to use a

PKCS#11 library provided by the vendor. On Microsoft Windows platforms the CSP API is

also adopted.

The most widely used cryptographic smartcards (excluding the GSM so-called "crypto

algorithm") are 3DES (Triple DES) and RSA. The key set is usually loaded (DES) or

generated (RSA) on the card at the personalization stage. ( Rankl & Effing, 1997.)

2.6 PROBLEMS

Another problem of smartcards may be the failure rate. The plastic card in which the chip is

embedded is fairly flexible, and the larger the chip, the higher the probability of breaking.

Smartcards are often carried in wallets or pockets — a fairly harsh environment for a chip.

However, for large banking systems, the failure-management cost can be more than offset by

the fraud reduction. A card enclosure might be a good idea.

(http://en.wikipedia.org/wiki/Smartcard).

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2.7 BENEFITS OF SMARTCARDS

Smartcards provide a means of effecting business transactions in a flexible, secure,

standard way with minimal human intervention.

Smartcard can provide strong authentication for single sign-on or enterprise single sign-on to

computers, laptops, data with encryption, enterprise resource planning platforms such as

SAP, and etc. (http://en.wikipedia.org/wiki/Smartcard)

2.8 WHAT IS E-ZWICH?

E-zwich is the brand name for the common platform, the National Switch, that links the

payment systems of all licensed banks and non-bank financial institutions e.g. Savings and

loans companies ,credit unions ,money transfer institutions, and rural banks in Ghana.

(www.e-zwich.com)

An e-zwich point of sale device issued by a licensed bank, and non-bank financial institutions

will have in it a retail merchant card registered to the customers’ tradional bank account. At

the end of the day, customers will settle all transactions on the POS electronically through e-

zwich to their bank account linked to the card .Customers can then draw on funds from their

bank. (www.e-zwich.com)

.

The introduction of e-zwich by the Ghana Interbank Payments and Settlements System

(GHIPSS) has broadened the scope of branchless banking in the country.

E-zwich’s uptake has been encouraging, and it is believed that should the project go

according to plan, the dream of the country to become a cashless economy could become a

reality. But, for the project to be successful, a lot more must be done.

10

The advantages of this new national payment platform are enormous. A customer using a

credit/debit, ATM card issued by a rural bank, can access cash from just about any ATM in

any city or town in Ghana, and use it to affect payment for goods and services at stores

equipped with PoS terminals. A city dweller will also be able to access funds via ATMs in

the deepest parts of Ghana (where ATMs exist). By Oluniyi David Ajoa on February 1st 2008.

The Deputy Governor of the Bank of Ghana, Dr. Mahamadu Bawumia on Wednesday, 15 th

August 2007 asked all banks to link their ATMs and Point of Sale (POS) device to the

National Switch, the E-zwich by March 21st, 2008.

Speaking at the launch of the Ghana Commercial Bank (GCB) Money Gram, Dr. Bawumia

said banks with existing switches were expected to upgrade them to make them compatible

with the National Switch by July 1st, 2008. The GCB money Gram service would be operated

through all its 133 branches.

Dr. Bawumia said the introduction of the National Switch and Smartcard payment system

would dramatically increase the number of people with access to financial services. Currently

about 80 percent of Ghana’s population did not operate any kind of bank account and this

represents a huge market opportunity for banks, rural banks, savings and loans companies. He

said; “The traditional Visa and MasterCard would still have their uses but what we are

introducing is a smartcard that is accessible to everyone and that can work everywhere, both

on line and off line, even in places without electricity”. He urged all the banks to issue the e-

zwich biometric smartcards to their customers and also said banks without switches / ATMs

and POS devices were expected to integrate their payment terminals directly into the National

Switch or through a e-zwich compatible switch.

On January 7th, 2008, Bank of Ghana issued a notice that it wishes to announce for the

information of all banks, savings and loans companies and the general public that as part of

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the system, it has in collaboration with the Ghana Association of Bankers, introduced the

following.

- a National Switch (E-zwich) to create a common platform for banks, savings and

loans companies.

- A Biometric Smartcard (E-zwich), a new very secure way of paying for goods and

services for all Ghanaians.

The Bank further announces that;

1) To facilitate the smooth implementation of the above systems by June 20, 2008

banks (including rural banks) and savings and loans companies should.

a. integrate all existing switches into the e-zwich;

b. issued e-zwich smartcards to each individual personal customer;

c. deploy e-zwich teller device at all branches and agencies;

d. deploy e-zwich compatible point of sale (POS) devices at all existing and

future acquired merchants outlets.

2) Banks and Savings and loans companies without switches, ATM or POS device

should acquire them and ensure that new payment are made directly into the

National switch or through an e-zwich compatible switch.

3) Existing ATM and POS devices installed by banks shall be upgraded to meet the

e-zwich standard or replace.

4) All new switches, ATMs, POS devices and cards or mobile phone payments

products issued or deployed must be e-zwich compliant.

5) Prior approval must be obtained from the Bank of Ghana for the deployment of

new switches, ATMs, POS devices or cards or mobile phone payment products.

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6) The Bank of Ghana further announces that the Ghana Interbank Payments and

Settlement System (GHIPSS) to manage business which includes

- National switch

- Biometric smart cards

- Cheque clearing

- Code line cheque formation

- Real Time Gross Settlement System (RTGS)

- Automated clearing House (ACH)

All banks will be required to be members of GHIPSS either directly or through

member banks.

7) Banks that wish to have direct access to the settlement system will have to be

members of the National switch and Biometric smartcard.

Bank of Ghana, ended it notices by asking all banks, savings and loans companies

and the general public due to take note of the above and be guided accordingly.

“James A. Odei, the secretary”

2.9 WHAT IS THE E-ZWICH SMARTCARD?

The e-zwich smartcard is a new and a very secure way of paying for goods and services

throughout the country based on biometric (finger print) identification.E-zwich allows

smartcard holders and merchants to load and spend funds as well as settle various

transactions. Because e-zwich links the payments platforms of all licensed banks, non-banks

financial institutions and rural banks, the e-zwich smartcard can be used in other bank’s

ATMs and POS device which has been integrated to the e-zwich.

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Purchases or payments made by individuals using the e-zwich smartcard will not attract any

fees.However,one will be charged a small fee for money transfers ,cash withdrawals ,and

some other transactions.(GHIPSS/WWW.E-ZWICH.COM)

2.10 FEATURES OF THE SMARTCARD

- Works for both banked and unbanked

- allows you to withdraw cash from any ATM or e-zwich terminal across Ghana

- Allows you to deposit cash unto the smartcard

- Allows cash balance enquires at any bank branch throughout the country

- Provides transaction reports

- Allows transfer of funds from one smartcard to another

- Allows transfer of funds from smartcard to merchant and bank account

- Allows online and offline merchant transactions

- Allows payment of utility bills

- Can be linked to more than one bank account

- It is based on biometric fingerprint identification system

2.11 HOW TO OBTAIN THE SMARTCARD / POS DEVICE

Thus, one can just walk into any bank, savings and Loans Company or their authorized

agents and get the card without having to open an account. A photo ID(e.g. a student id card,

voters id card, drivers license or passport) and of course ones finger prints will be required to

get an e-zwich smartcard. The process itself should take between 5 and 10 minutes. (GHIPSS

/WWW.E-ZWICH.COM).

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2.12 USES OF THE E-ZWICH SMARTCARD.

The smartcard is accepted by businesses with e-zwich point of sale device. these businesses

include shops, hotels, restaurants, hospitals, schools etc.Customers can load their e-zwich

smartcard with funds by paying in cash at any licensed financial institution or their authorized

agents (e.g. Ghana post).Customers can also instruct their employees to pay their wages and

salaries to the card’s unique serial number or receive transfer of funds from other card

holders irrespective of which financial institution that issued it. (GHIPSS).

Moreover, if one loses his/her smartcard, one does not lose his money. The e-zwich card

cannot be used by another person because of the finger print authentication requirement. A

report to the financial institution that issued the card or any authorized agent, one will be re-

issued with a new card and his/her balance on the card restored in a maximum of 48 hours.E-

zwich will reject any attempt to utilize the previous card.(GHIPSS)

The e-zwich smartcard allows one to have a current account and savings account in a separate

wallet on the card, funds kept in the savings account will attract interest using the rate set by

financial institution that issued it. If one becomes deceased, the card is treated as part of his

estate and funds can be recovered through the established legal procedures.

(GHIPSS/WWW.E-ZWICH.COM).

2.13 BENEFIT TO SMARTCARD HOLDERS

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Less cash to carry

Easier and more accurate expenditure tracking

competitive interest earned on balances on linked bank accounts

Loss of your smartcard does not translate into loss of money.

Multifunctional; offering the convenience of executing multiple forms of

transactions.

Can be used anywhere in Ghana

2.14 BENEFITS TO THE MERCHANTS

Eliminate cash shortages resulting from erroneous counting of large sums of cash

Enhance cash flow; Payment received via smartcard takes less time to clear than

the traditional three days for cheques

Eliminates risks associated with carrying cash sales to the bank

Reduces the threat of arm robbery and theft at business places

Offers extra earnings from transaction fees

Minimizes exposure to fraud

CHAPTER THREE

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3.1 METHODOLOGY

This chapter of the study focuses on the methodology used in the study, procedures used to

obtain data and the techniques used in analyzing the data obtained. It highlights the type of

research, population of the study, sample techniques and size, data collection instrument, as

well as methods of data analysis.

3.2 TYPE OF RESEARCH

This research is an investigative analytical research that seeks to examine the Prospects and

Challenges of the e- zwich smartcard introduced by the Bank of Ghana.

3.3 POPULATION

The population of the study comprises of the management and staff of financial institutions

and the general public. Specifically, Prudential Bank Limited and United Bank of Africa

branch offices at the Madina market.

3.4 SAMPLE AND SAMPLING TECHNIQUE

For the purpose of obtaining data, a sample size of fifty (50) was drawn from the targeted

population. A questionnaire was administered to some management and staff of Prudential

Bank and UBA at the Madina branch office. Random sampling was used to gather data from

the general public whiles purposive sampling was used for management and staff of the name

financial institutions. The purposive sampling was used for management and staff due to the

17

focus of the research work, which is limited to a group of people with the same interest and

characteristics. In addition, random sampling was used for the customers because the

population was large and heterogeneous

3.5 METHOD OF DATA COLLECTION

For the purpose of reliable information, data for this research was collected through primary

and secondary sources.  The questionnaire and interview are the primary source of the data.

The questionnaires were administered to some business men and women at the Madina

market as well as some students from Valley View University, whilst management and staff

of the some financial institutions were interviewed. The secondary data was obtained from

documentary sources including; Published materials on e-zwich smartcard, and Published and

Unpublished materials from the Internet.

3.6. INSTRUMENT FOR DATA COLLECTION

The instrument used for data collection was the questionnaires. An intensive study was done

to acquire the needed information from the respondents.

  

3.7 PROCEDURE FOR DATA COLLECTION

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The researcher paid personal visits to the branch office of Prudential Bank limited and UBA

all at the Madina market, to deliver and collect questionnaires. The questionnaires which

were simple to answer were administered to a sample of 50 people randomly selected from

the general public, and the questions asked were based on the objectives of the study.

3.8 METHOD OF DATA ANALYSIS

Data collected was analyzed through qualitative method. Also a descriptive analysis was used

to make the data more comprehensible. A percentage analyses was also used to draw

relationship of the views of the respondents and the total respondents and this is displayed in

table and graph form for easy assimilation. The outcomes of the structured questionnaires

were put into tables. Findings were deduced from the analysis and recommendations were

made to address the summary of the data.

CHAPTER IV

19

DATA PRESENTATION AND ANALYSIS.

4.1 INTRODUCTION

E-zwich is the brand name for the common platform, the National Switch that links the

payment systems of all licensed banks and non-bank financial institutions.

The e-zwich smartcard is a new and very secure way of paying for goods and services

throughout the country based on biometric identification. e-zwich allows smartcard holders

and Merchants to load and spend funds as well as settle various transactions.

The e-zwich smartcard can be used to perform various banking and retail functions. These

include cash withdrawals, payments for goods and services, money transfers, receiving salary

and wage payments, and making bill payments from any e-zwich point of sale (POS) or ATM

across the country.

4.2 GENERAL INFORMATION ON SAMPLE FIRMS

Prudential Bank Limited

Prudential Bank Limited (PBL) was promoted by Messrs J.S. Addo consultants limited and

incorporated in May 1993. The Bank opened its doors for business on 15 th august 1996. The

bank is wholly owned by indigenous Ghanaian companies and individuals.

Prudential Bank limited has been designed as a commercial or development bank with a

strategic focus on the development and financing of industry and Export. It also provided

international banking service to its customers and inward remittance services to the general

public. To facilitate International business and transfer of funds Prudential bank limited does

20

business through the following correspondent banks: Citibank, BHF Bank and Ghana

International Bank and has it heard office located at 8 Nima Avenue, Ring Road Central,

Accra, Ghana.

Prudential Bank limited mission is to provide domestic and international banking services

with a strategic focus on project financing and export development.

United Bank of Africa (Ghana)

United Bank for Africa (Ghana) limited was initially incorporated and register as Standard

Trust Bank limited at the Registrar Generals Department. In December 2004, the Bank of

Ghana issued the then Standard Trust Bank limited with a license to operate as a universal

bank, making it the first bank to be licensed under the Banking Act 2004 (Act 673) and the

nineteenth bank to be licensed in Ghana. The bank serves both retail and wholesale banking

customers with a comprehensive range of products. These include, the traditional banking

products and services, but with an emphasis on technology driven products and services,

some of it products and service are:

Overdraft and other credit facilities including syndications.

International trade and commodity financing across all markets.

Funds management services.

Consumer credits and Employee financing

Foreign currency sales and trading, as well as management of foreign currency

accounts.

4.3 DATA PRESENTATION AND ANALYSIS.

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TABLE 4.3.1

THE GENDER OF RESPONDENTS.

ResponsesFrequency Percent Valid Percent Cumulative Percent

Male 26 52 52 52

Female 24 48 48 100

Total 50 100 100

Out of the fifty questionnaires administered, 26 males representing 52% of the respondents

answered as well 24 females, representing 48% of the respondents answered as shown in the

table above.

TABLE 4.3.2

AGE OF RESPONDENTS.

Age Frequency Percent Valid Percent Cumulative Percent

18-29 27 54 54 54

30-39 8 16 16 70

40-49 7 14 14 84

50+ 8 16 16 100

Total 50 100 100

Here, 27 respondents fell within the age range of 18-29, 8 respondents fell within the age

range of 30-39, and 7 respondents also fell within the range of 40-49 and 8 respondents above

the age of 50 as shown in the table above.

TABLE 4.3.3

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OCCUPATION OF RESPONDENTS.

Occupation Frequency Percent Valid Percent Cumulative Percent

student 17 34 34 34

self employed 17 34 34 68

civil servant 16 32 32 100

Total 50 100 100

Thus, considering the occupation of the respondents, 17 respondents were student, whiles

another 17 of them were self-employed and with the remaining 16 respondents out of the 50

questionnaire administered being civil servants as shown in the table above.

TABLE 4.3.4.

BANK ACCOUNT OF CUSTOMERS.

Responses Frequency Percent Valid Percent Cumulative Percent

yes 43 86 87 87

no 6 12 12 100

Total 49 98 100

Missing 1 2

Total 50 100

Considering the saving status of the respondents, 43 respondents said they had a bank

account while 6 respondents did not have any bank account as indicated above.

TABLE 4.3.5.

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ACCOUNT HOLDINGS OF RESPONDENTS.

BanksFrequency Percent Valid Percent Cumulative Percent

Commercial Bank 9 18 19.6 19.6

Savings and loans 11 22 23.9 43.5

National Investment Bank 4 8 8.7 52.2

Others 22 44 47.8 100

Total 46 92 100

missing 4 8

Total 50 100

Out of the 43 respondents who had a bank account, 9 of them had their account with

commercial banks, 11 with the savings and loans, 4 with the National Investment Bank and

22 of the respondents had theirs with other banks as shown in the table above.

TABLE 4.3.6.

WORKING STATUS OF THE SMART CARD.

Responses Frequency Percent Valid Percent Cumulative Percent

Yes 25 50 83.3 83.3

No 5 10 16.7 100.0

Total 30 60 100.0

Missing 20 40

Total 50 100

Out of the 50 questionnaires administered, 50% of the respondents said, the card was working

whiles 10% of the respondents were not aware the uses of the smartcard, with the remaining

40% of them having no idea about the working status of the smartcard.

TABLE 4.3.7.

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RELIABILITY OF THE SMART CARD.

ResponsesFrequency Percent Valid Percent Cumulative Percent

Very reliable 10 20 29 29.4

Quite reliable 12 24 35 64.7

Not reliable 12 24 35 100

Total 34 68 100

Missing 16 32

Total 50 100

Considering the reliability of the smartcard, 20% of those respondents who had the card said

it was very reliable, 24% said it was quite reliable, whiles another 24% of them said it was

not reliable. The remaining 32% of the respondents missing represent those who have no idea

about the smartcard.

TABLE 4.3.8

A

critical look at how convenience the smartcard was to the general public, 19.4% of the

respondents said it was very convenient, 54.8% of the respondent said it was quite

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HOW CONVENIENT THE SMART CARD IS TO ITS USERS.

Responses Frequency Percent Valid Percent Cumulative Percent

Very convenient 6 12 19.4 19.4

Quite convenient 17 34 54.8 74.2

Not convenient 8 16 25.8 100

Total 31 62 100

Missing 19 38

Total 50 100

convenient, whiles the remained 25.8% said it was not convenient. The missing figures

represent those who have no idea of the smartcard.

TABLE 4.3.9

Also, looking at the card efficiency in the operation of banks as it was introduced, 38% of

respondents said it was efficient, whiles 24% of them said it was not efficient, and the

remaining 38 of the respondents had no idea about it.

TABLE 4.3.10.

IMPROVEENT OF THE SMARTCARD IN THE PAYMENT AND SETTLEMENT SYSTEM

IN THE FINANCIAL SECTOR.

Responses

Frequency Percent Valid Percent Cumulative Percent

Yes 27 54 84.4 84.4

No 5 10 15.6 100

Total 32 64 100

Missing 18 36

Total 50 100

Here, 54% of the respondents said the smartcard has improved the payment and settlement

system in the country, whiles 10% of the respondents said no improvement had taken place.

The remaining 36% of the respondents did not have any idea about it.

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THE EFFICIENCY OF THE SMART CARD.

ResponsesFrequency Percent Valid Percent Cumulative Percent

Yes 19 38 61.3 61.3

No 12 24 38.7 100

Total 31 62 100

Missing 19 38

Total 50 100

TABLE 4.3.11

THE PUBLICITY OF THE SMARTCARD.

Publicity Frequency Percent Valid Percent Cumulative Percent

Extensive 7 14 21.2 21.2

Good 18 36 54.5 75.8

Poor 8 16 24.2 100

Total 33 66 100

Missing 17 34

Total 50 100

Considering the publicity of the smartcard, 14% of the respondents said it was extensive,

36% of them said it was good, with 16% of the respondents saying it was bad. The missing

34% of them did not give an answer to the question.

TABLE 4.3.12

THE RATE AT WHICH MONEY IS DEPOSIT ON THE CARD.

Deposit Frequency Percent Valid Percent Cumulative Percent

Daily 1 2 4.0 4.0

Weekly 1 2 4.0 8.0

Monthly 13 26 52.0 60.0

Yearly 10 20 40.0 100.0

Total 25 50 100.0

Missing 25 50

Total 50 100

A look at the rate at which people deposited money on the smartcard, 4% of respondents said

daily, another 4% of them said weekly, 52% of them said monthly and the remaining 40% of

the respondents said yearly. The missing figures were those who did not deposit any money

on the smartcard.

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TABLE 4.3.13

THE RATE OF TRANSACTION WITH THE CARD.

ResponseFrequency Percent Valid Percent Cumulative Percent

Yes 8 16.0 32.0 32.0

No 17 34.0 68.0 100.0

Total 25 50.0 100.0

Missing 25 50.0

Total 50 100.0

The table above also displays the transactions rate of the card. 32% of respondents said they

were able to use their card to undertake some transactions whiles the remaining 68% of the

respondents said they were not able to use their card to undertake any transaction.

TABLE 4.3.14

THE PEOPLE WHO HAVE THE SMART CARD.

ResponseFrequency Percent Valid Percent Cumulative Percent

yes 23 46 47.9 47.9

no 25 50 52.1 100

Total 48 96 100

missing 2 4

Total 50 100

Considering people who had acquired the e-zwich smartcard, 23 respondents said they had

the card representing 46% of the respondents, whiles 25 respondents never had the card,

representing 50% of the respondents who answered the questionnaires as shown in the table

above.

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TABLE 4.3.15.

SMART CARD USERS.

Responses Frequency Percent Valid Percent Cumulative Percent

Yes 21 42 67 67

No 10 20 32 100

Total 31 62 100

Missing 19 38

Total 50 100

Out of 23 respondents who had the smartcard, 42% of them were using their cards, 20% of

them did not normally use their card, and whiles 38% of them had never used their card

before. It can be concluded from this findings that, the card is not effectively used by those

who had them, which will not encourage people to sign onto the program.

4.4 DISCUSSION OF FINDINGS ON RESEARCH OBJECTIVE ONE:

EFFECTS OF THE E-ZWICH SMARTCARD ON THE FINANCIAL SECTOR.

The first objective of this study was to consider the effects of the smartcard on the financial

sector. From the questionnaire administered to e-zwich officials at the Prudential bank

Limited branch and United bank Of Africa branch both at Madina. Respondents said the card

29

had helped in the operation of banks, thus, it has contributed to about 10-30% in banks

operation with the remaining percentage giving room for more improvement. Respondents

also said the use of the smartcard had been quite profitable to the banks operations.

Also, a critical look at how customers of the various banks patronized the use of the card.

Respondent at the United Bank of Africa branch at the Madina said, on the average about 50

people utilized the facility, whiles, respondent at the Madina branch of Prudential Bank also

gave the same response.

On the other hand, respondents at the two banks’ branches said customers faced problems in

using the card and recommended that, educating them on the various features of the card will

help solve and minimize problems customers faced.

Moreover, considering the advantages of the smartcard over other cards already in used by

bank customers, respondents of the two banks said, it was very safe in terms of security,

because of the use of fingerprint for authentication. Also, unlike the other smartcards which

can only be used at the issuing banks’ ATM, e-zwich can be use nationally irrespective of the

issuing bank. The card can also be used by both account holders and non-account holders. It

can also be used nationwide, once network coverage is available.

Furthermore, respondents of the two banks also said the prospect of the card demands greater

awareness, through educating the public and promotions must be undertaken to encourage

people to use the card. Also, it has to be enforced on the large companies and stores to use the

point of sale device to enhance transactions at all times.

Also, considering the effects of the smartcard on the financial sector at the short-run,

respondents said, the card will help in the establishment of a cashless economy as more and

more people get enrolled unto it and at the long-run, it will help in reduction of robbery on

traders and a very good substitute product for cheques. It will also help control inflation in

the country.

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4.5 DISCUSSION OF FINDINGS ON RESEARCH OBJECTIVE TWO.

TO IDENTIFY THE DIFFICULTIES AND BENEFITS FACED BY THE GENERAL

PUBLIC IN USING THE E-ZWICH SMARTCARD

Findings on the difficulties and benefits faced by the general public in using the card,

indicated that, out of the 23 respondents who had the smartcard, 42% of them were using

their card, 20% sometimes used their cards whiles 38% of them had never used their cards

before. Also, 38% of the respondents said it was not efficient in using the card; whiles 24%

said it was efficient, in the sense that, aside depositing money on the card, they were not able

to use their cards for any other purpose. The remaining 38% said, the card was of no use to

them, since they had less money to spend and as such had no surplus to save.

In addition to this, 20% of those respondents who had the card said it was very reliable to use,

24% answered not reliable to be used. The remaining respondents who had no idea of the

uses smartcard believed that their money was not safe on the card and as such found it

difficult using the card.

Also, from the findings above, a higher percentage of the respondents said it was not

convenient using the card, in the sense that, not all selling points had the e-zwich machine

and this makes it difficult for smartcard holders, who had all their money on the card to

undertake transactions.

4.6 DISCUSSION OF FINDINGS ON RESEARCH OBJECTIVE THREE.

TO DETERMINE WHY MOST PEOPLE HAVE NOT HOOKED ON TO THE

PROGRAM

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On the other hand, in answering why most people have not roll-up on the program. 46% of

the respondents said, they had the smartcard with 50% saying they do not have the smartcard.

Findings, indicate that, respondents who did not had the card, are not aware of the used of the

card, some also complained that, they already had other smartcards of which they are

satisfied with.

CHAPTER FIVE

5.1 SUMMARY

32

E-zwich is the brand name for the common platform that links the payment system of all

banks and non banking financial institutions. The e-zwich is a new and secured way of

paying for goods and services throughout the country based on biometric (finger print)

identification. The card is more versatile than traditional bank issued card.

The researcher stands to identify the effects of the e-zwich smartcard on the financial sector,

to identify the difficulties faced and benefits derive by the general in using the card and to

determine why most people have not hooked on to the program. This study will serve as a

source of reference to researchers who will like to engage in further research work or who

need information on this same topic or related topics.

Moreover, this research paper is limited by a number of factors which include time

constraints, inadequate funds and insufficient material sources.Findings and conclusions on

this research are limited to the questionnaires given to United Bank of Africa (Ghana) and

Prudential Bank Limited branches at Madina, as well as the response from the 50 sample

questionnaires given to the general public.

5.2 CONCLUSION

From the discussion above, the researcher notices that about 50% of the respondent have not

sign up unto the program, on the basis that they have other smartcards, others too complain

that they are not aware of the uses of the card. On the other hand 50% of the respondent who

have sign-up unto the programme, majority of them have difficulty in using the card, some

complain that, since not all shops are using the e-zwich machine, why should they deposit

their money on it and face problems in undertaking transactions.

33

Moreover, considering its effect on the financial sector findings indicates that it has

contributed quite profitable in the operations of the financial institutions and there are more

room for development.

A critical look at the findings, indicate that, should the programme go as expected, it will

help in the establishment of a cashless economy as more people get enrolled unto the

program. It will also lead to a reduction in robbery encountered by traders as well as a very

good substitute product for cheque at the long and short run.

Conclusively, it has been found out that, e-zwich is a good product for the Ghanaian

economy, where quite a number of the citizens are illiterates and majority of them do not

undertake any savings. Moreover, the use of the card is very safe in terms of handling money

since it uses the fingerprint for authentication. Also it can be used by account holders and

non-account holders, as well as, it nationwide accessibility once network coverage is present.

This features of the card, gives it advantage over other smartcards already in existence.

5.3 RECOMMENDATION.

Since e-zwich is a substitutional technology that has been introduced by the bank of Ghana,

the researcher recommends that, creating awareness by educating the public on the uses of

the smartcard through recruiting students on pilot basis, where these students will visit

various shops and traders to demonstrate how the card functions to the general public. This

will encourage more people to sign up unto the program.

In address to the challenge of users not being able to use the card to undertake all

transactions, the researcher, recommends that all selling points in the country should be

giving the point of sale device to enhance efficiency in transactions using the smartcard.

34

Lastly, the researcher also recommends that all financial institutions should encourage their

various customers to use the smartcard in their operations, to promote the use of the card and

not just issue it to them to help achieve the short and long-term objectives of the card.

35

5.4 BIBLIOGRAPHY

Rankl & Effing, (1997).Smartcard handbook, John Willy & Sons press.

Guthery B.Scott & Jurgensen M. Timothy, (1998).Smartcard Developers’ kits,

Macmillan Technical Publishing.

Http://en.wikipedia.org/wiki/Smartcard .

Http://www.e-zwich.com

Http://www.gcb.com.gh

Http://www.ubaghana.com

Http://www.prudentbank.com

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APPENDIX A

QUESTIONAIRE

The researcher is a final year business administration student of Valley View University. This study forms part of a project for the award of Bachelor of Business Administration Degree by the University. The questionnaire seeks to collect data on the prospects and challenges of E-switch smart card introduced by the Bank of Ghana.

I therefore count on your cooperation to assist me finish my paper by filling out the questionnaire below. The information gathered will be used solely for the research. Thank you.

Effects of e-zwich on the financial sector

1. Has the e-zwich helped in the operations of the bank A. Yes ( )B. No ( )

2. How profitable has the impact of e-zwich been over the years in the Banks operationA. Very profitableB. Quite profitableC. Unprofitable

3. What percentage will you assign to the profitability of these facilitiesA. 10 – 30% ( )B. 40 – 70% ( )C. Above 70% ( )

4. On the average how many people utilize the e-zwich smartcard in your branchA. 1 – 50 ( )B. 50 – 100 ( )C. Above 100 ( )

5. Do customers face any problem in using the smartcard?

37

A. Yes ( )B. No ( )

6. If yes, what measures are being taken to solve that problem?

7. If no, why have most people not sign up on the program

8. What advantages has e-zwich smartcards over other smartcards already in existence

9. What can be done to improve upon the use of the e-zwich smartcard nationwide?

10. What role do you think the card will play in the a) Next 2

years:_____________________________________________________________

b) Next 10 years: ____________________________________________________________

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APPENDIX B

QUESTIONAIRE

The researcher is a final year business administration student of Valley View University. This study forms part of a project for the award of Bachelor of Business Administration Degree by the University. The questionnaire seeks to collect data on the prospects and challenges of E-switch smart card introduced by the Bank of Ghana.

I therefore count on your cooperation to assist me finish my paper by filling out the questionnaire below. The information gathered will be used solely for the research. Thank you.

1. GenderA. Male ( )B. Female ( )

2. Which age bracket do you belong? A. 18 – 29 ( ) B. 30 – 39 ( ) C. 40 – 49 ( ) D. 50+ ( )

3. What is your occupation A. (Student) B. (civil servant) C. (self-employed)

4. Do you have any Bank Account?A. Yes ( )B. No ( )

5. If yes, state the Name of the Bank__________________________________________

6. If No why________________________________________________________________________________________________________________

7. Do you have an e-zwich smartcard?A. Yes ( )B. No ( )

8. If No, why have you not roll-up onto the program?

___________________________________________________________________________________________________________________________________________

9. Have you used your smartcard in the last one month?A. Yes ( )B. No ( )

10. Was the smartcard working the last time you used it?A. Yes ( ) B. No ( )

11. Which comment best describe your views on reliability of the smartcard?A. Very Reliable ( )B. Quite Reliable ( )

39

C. Not Reliable ( )

12. How convenient is the card to you?A. Very convenient ( )B. Quite convenient ( )C. Not convenient ( )

13. Do you think the computerization of all financial and non financial institution to the smartcard has brought efficiency in their operations?

A. Yes ( )B. No ( )

Comment on any_______________________________________________________________________________________________________________________________________

14. Do you think the networking of the financial and non financial institutions to the smartcard would improve the payment and settlement system?A. Yes ( )B. No ( )

15. How would you rate e-zwich smartcard publicity in the country?A. ExtensiveB. GoodC. Poor16. How often do you deposit money on your e-zwich smartcard?

A. Daily ( )B. Weekly ( )C. Monthly ( )D. Yearly ( )

17. Are you able to use your e-zwich smartcard to undertake all your transactionsA. Yes ( )B. No ( )

18. If yes, how efficient is it

19. If No, what are some difficulties involved in using your e-zwich smartcard

20. What could be done (if any) to improve upon the e-zwich smartcard?

40