The Bank of Ghana has introduced a new directive for Payment Service Providers (PSPs) and Settlement Banks regarding the handling of merchant funds. PSPs can facilitate payment transactions and collect funds on behalf of merchants but are not permitted to hold, use, or exercise ownership rights over these funds. This directive aims to protect merchant funds and ensure timely settlement.
According to the directive, PSPs must hold merchant collection funds in designated settlement accounts separate from their operational and business accounts. These funds remain the property of the merchants until settlement is effected as per the Service Level Agreement (SLA) between the PSP and the merchant. This move is designed to prevent the commingling of merchant funds with PSPs' operational funds.
The directive, signed by Aimee Vyda Quashie, Secretary of the Bank of Ghana, was issued under Section 101 of the Payment Systems and Services Act, 2019 (Act 987). It emphasizes that PSPs are licensed to facilitate transactions but are not deposit-taking institutions. Non-compliance with the directive will attract regulatory sanctions.
Under the new rules, PSPs must credit merchant funds into designated settlement accounts and settle them into merchants' bank accounts according to agreed timelines. PSPs are not allowed to withdraw, transfer, or encumber merchant funds except for settlement purposes and transferring earned fees. This ensures that merchant funds are safeguarded and used only for intended purposes.
Settlement Banks have also been directed to maintain and operate settlement accounts solely for settlement purposes. They must ensure that PSPs do not access or utilize merchant funds for operational or financing purposes unrelated to merchant settlement. The portion of merchant funds representing PSP fees may only be transferred to the PSP's operational account as part of the settlement process.
PSPs and Settlement Banks are required to maintain adequate records, controls, and audit trails to demonstrate compliance with the new requirements. The Bank of Ghana may also require settlement banks to submit statements relating to settlement accounts at intervals determined by the central bank. This will help in monitoring and enforcing compliance with the directive.
Failure to comply with the directive will constitute a breach of the regulatory framework and may attract regulatory, supervisory, and enforcement actions. All PSPs and Settlement Banks are required to ensure immediate compliance and review their operational arrangements and internal controls accordingly. This move aims to enhance the security and efficiency of payment systems in Ghana.
Key points
- PSPs must segregate merchant funds into designated settlement accounts.
- Merchant funds must be settled into merchants' bank accounts according to agreed timelines.
- Non-compliance with the directive will attract regulatory sanctions.
