The Bank of Ghana has ordered Spektra Technologies Payment network Dash App, which has been in operation since its inception in 2019, to cease activities in Ghana, citing the FinTech startup provision of services without authorisation.
Services like wallet creation, cross-border payment, and utility payment, according to the regulatory body, require necessary approval or license to operate. This comes only days after the business announced a $32.8 million fundraising round for expansion.
Ghana’s Fintech Landscape
In Ghana, there are over 70 FinTech companies with no association or body to oversee them in an ever-expanding ecosystem. As a result, Ghana’s FinTech landscape is complicated, as is the need for laws.
The presence of the Bank of Ghana across the entire financial system offers enough supervision and regulatory strength since the regulatory body ensuring rigorous compliance with directives is critical to sustaining a healthy ecosystem.
The apex bank’s recent ruling would encourage entrepreneurs and financial institutions to follow the rules. They are, in the end, preventing illicit or fraudulent operations from infiltrating the financial sector.
Startups, such as the Dash app, are sometimes confronted with exorbitant fees for government approval. High regulatory expenses may slow the pace of innovation in the country, as many startups may be hesitant to enter the system due to its requirements. To go back to business, the corporation will most likely pursue the necessary approvals for the Dash app.
The platform has been growing, and we even covered them in April 2021. Its goal is to create a unified alternative payment network for people in Africa by leveraging the continent Mobile Money network.
What is the purpose of the cease-and-desist order?
According to Kwame A. Oppong, the Head of Fintech and Innovation at BoG, who issued a letter to the CEO of Spektra Technologies, Dash app was offering services without approval.
Cross-border transfers, wallet creations, and bill/utility payments are among the identified illegal activities.
The authority goes on to say that the company needs to have the necessary approvals before it can start operating in the country.
Dash already has lofty goals. It has begun to combine more than 200 mobile money wallets into a single wallet that might be used widely across Africa.
When we spoke with the Dash team, they told us that they had already added 6 wallets to their platform. Kenya and Ghana had previously completed the six.
“However, by adding value-added services on top of our platform, we’re taking a page from AliPay/WeChat Pay playbook.” This would allow Dash users to access services through a single app,” said Prince Boakye, the company founder, and CEO.