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Mobile Money Use, Digital Banking Services and Velocity of Money in Ghana

Author

Listed:
  • Evans N. N. D. Ocansey

    (Valley View University, Oyibi, Ghana,)

  • Philomena Dadzie

    (University of Professional Studies, Accra, Ghana.)

  • Nicholas Bamegne Nambie

    (Valley View University, Oyibi, Ghana,)

Abstract

Investigating the correlation between digital financial services, mobile money usage, and money velocity in Ghana, the study analysed time series data spanning from 1992 to 2022. A composite index was constructed by principal component analysis using data extracted from the world development indicators, with the components mobile money usage, digital financial services, and velocity of money. The estimation utilised an impulse response function and vector error correction model; the results indicated that mobile money, digital financial services, and money velocity are related in both the short and long term. Furthermore, the application of a standard deviation innovation to the velocity of money produced increases of both positive and negative magnitude for all the variables. This suggests that mobile money, digital banking services, and velocity of money in Ghana are interdependent in an asymmetric manner. In order to facilitate an increase in the velocity of money, the research concluded that policymakers should guarantee that a greater proportion of the population has access to mobile money and digital banking services. In addition to promoting mobile money, online banking services, and digital payment methods on purpose, the government should reduce reliance on physical currency and expedite the circulation of money. It is recommended that future longitudinal studies involving African nations employ diverse estimation techniques.

Suggested Citation

  • Evans N. N. D. Ocansey & Philomena Dadzie & Nicholas Bamegne Nambie, 2024. "Mobile Money Use, Digital Banking Services and Velocity of Money in Ghana," International Journal of Economics and Financial Issues, International Journal of Economics and Financial Issues, vol. 14(2), pages 218-233, March.
    • Handle: RePEc:eco:journ1:2024-02-23
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    1. Ida Claudia Panetta & Elaheh Anjomrouz & Paola Paiardini & Sabrina Leo, 2025. "Digital by Default? A Critical Review of Age-Driven Inequalities in Payment Innovation," JRFM, MDPI, vol. 18(6), pages 1-28, June.

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    JEL classification:

    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics
    • G3 - Financial Economics - - Corporate Finance and Governance
    • G1 - Financial Economics - - General Financial Markets
    • G4 - Financial Economics - - Behavioral Finance
    • D0 - Microeconomics - - General
    • G0 - Financial Economics - - General

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