In a move that has sent shockwaves through Ghana’s burgeoning remittance market, the Bank of Ghana (BoG) has initiated a series of license suspensions, targeting over ten fintech companies operating in the sector. This clampdown comes amid rising concerns over compliance lapses, violations of foreign exchange laws, and inadequate adherence to anti-money laundering (AML) and counter-financing of terrorism (CFT) regulations, which the central bank insists are critical for maintaining financial stability in the country.
The latest in this wave of enforcement actions is Taptap Send, whose remittance services have been temporarily suspended as of November 8, 2024. The BoG cited a breach of the Foreign Exchange Act, 2006 (Act 723), specifically Section 3(1), which mandates that any entity handling foreign exchange transactions in Ghana must obtain proper licensing. According to the BoG, Taptap Send operated a cedi remittance wallet in violation of these requirements, further contravening guidelines for inward remittances issued to ensure the secure and lawful handling of cross-border payments.
In a statement, the BoG highlighted that compliance lapses were discovered within Taptap Send’s operations regarding the crediting of local settlement accounts and adherence to AML/CFT protocols, both of which are foundational under the Updated Guidelines for Inward Remittance Services. These guidelines set forth requirements that remittance payments reach beneficiaries within a 24-hour window and obligate settlement banks to report any suspected violations.
The central bank issued a stern warning, emphasizing that any further breaches by Taptap Send or other fintechs could lead to more severe penalties, including license revocations.
In a similar move, the BoG recently suspended the Foreign Exchange Trading License of Consolidated Bank Ghana (CBG), effective November 26, citing repeated violations of foreign exchange regulations. The suspension followed regulatory scrutiny over CBG’s handling of remittances and foreign exchange operations, which allegedly violated AML/CFT rules. CBG’s suspension, the BoG said, serves as a signal to all banks about the consequences of regulatory non-compliance and the central bank’s determination to safeguard Ghana’s financial system integrity.
The BoG has also previously suspended the foreign exchange trading licenses of Guaranty Trust Bank Ghana Limited and FBNBank Ghana Limited for similar violations, underscoring the ongoing nature of its compliance drive. Both institutions were penalized for what the BoG described as “fraudulent documentation” in their forex operations.
Widening Regulatory Dragnet
In 2023, Zeepay Ghana Limited, one of the country’s leading remittance firms, was penalized with a fine and a temporary suspension of its Forex License for non-compliance with local settlement rules under Clause 7.3(a) of the inward remittance guidelines. Zeepay’s suspension followed a string of similar actions against smaller fintech companies, which the BoG said had neglected to abide by foreign exchange regulations.
LemFi, another fintech that had been building its brand around low-cost remittance services, also faced suspension last year. In a statement, LemFi confirmed the suspension of its Ghana operations, apologizing to customers who would no longer be able to send money to local banks and mobile money providers. According to the BoG, LemFi operated without the required regulatory approval, a violation that led the central bank to list the company among unapproved money transfer organizations. The BoG advised financial institutions and the public to cease all transactions with LemFi, warning of severe penalties for continued engagement with unauthorized providers. Two months after suspension, the company returned, having regularized its compliance with BoG.
Bank of Ghana’s license suspension orders extend beyond high-profile remittance companies like Zeepay and LemFi. Other international remittance operators, including Wise, Xoom, TransferGo, Sendvalu, Boss Revolution, BTC-Aza Finance, and Supersonicz, have all faced similar suspension from the central bank. These firms, according to the BoG, have failed to comply with the Payment Systems and Services Act, 2019 (Act 987), which governs the licensing and operation of electronic money issuers and payment service providers in Ghana. BoG reports indicate that these companies also breached Section 3(1) of the Foreign Exchange Act by engaging in unauthorized foreign currency transactions.
The BoG has urged Ghanaians to seek alternative, licensed channels such as traditional banks, mobile money providers, and authorized remittance firms like Western Union and MoneyGram. These authorized entities, it said, are held to strict regulatory standards to ensure customer security and compliance with financial integrity norms.
Ghana’s remittance market has expanded rapidly in recent years, largely fueled by technological advances in mobile payments and growing demand from the diaspora. In 2023, Ghana received US\$2.4 billion in personal remittances, which is estimated to account for about 6% of the country’s GDP. This makes Ghana the second largest recipient of remittances in sub-Saharan Africa, after Nigeria. Many fintech companies have entered the market, promoting accessibility, ease of use, and cost savings through digital-first remittance solutions. While this growth has expanded financial inclusion, the central bank has voiced concerns that some operators may be sidestepping regulatory requirements.
BoG Governor Ernest Addison recently commented on the matter, stating, “The growth of digital financial services presents tremendous opportunities, but it is equally critical that we enforce compliance to protect consumers and maintain the integrity of Ghana’s financial system.”
Implications for the Market and Investors
The recent enforcement actions have had a ripple effect throughout the industry, with analysts noting that increased scrutiny could dampen investor enthusiasm. Taptap Send, for instance, raised $65 million in Series B funding in 2021, positioning itself as a promising player in low-cost, digital remittances. Its backers, including Spark Capital, Canaan Partners, and Breyer Capital, were attracted to the company’s unique model of fee-free transfers and market reach. The Bank of Ghana’s action now casts a shadow over remittance startup Taptap Send’s operating license and growth prospects in Ghana, as well as other operators facing similar compliance challenges.
For investors, the intensified regulatory environment in Ghana serves as a reminder of the complexities involved in navigating emerging markets with evolving regulatory frameworks. While Ghana’s fintech sector continues to hold promise, industry experts caution that operators will need to prioritize compliance to avoid reputational and operational risks.
The Bank of Ghana has stated that its recent enforcement measures are part of a broader effort to strengthen regulatory oversight amid a rapidly evolving fintech landscape. The central bank has hinted that it may introduce additional reforms to streamline licensing and compliance processes for fintechs, potentially providing clearer pathways for legitimate businesses to operate while excluding rogue players.
As the BoG continues to enforce regulatory measures, the wave of license suspensions sends a strong message that Ghana’s remittance market, while dynamic, will not operate without limits. For consumers, this may mean fewer low-cost options for cross-border transfers in the near term. However, BoG officials argue that strict oversight is essential to maintain a stable and secure financial ecosystem, one that can sustainably accommodate the fintech sector’s rapid growth and serve the needs of Ghanaians both locally and abroad.