Kampala. Mobile telecom operator, MTN has increased mobile money to bank charges by between 33 and 66 per cent, respectively.
The increments have almost tripled, which will impact transitions on the platform.
In a new schedule released on Monday, MTN announced that effective February 1, customers depositing money using mobile money to bank, also known as mobile wallet, will be charged using new rates.
For instance, the notice indicated, a customer depositing between Shs250,001 and Shs500,000 would be charged Shs6,000 up from Shs2,000.
The notice further indicated that a customer depositing between Shs500,001 and Shs1m would pay Shs9,000 up from Shs3,000.
For deposits ranging from Shs1m to Shs2,000,001, a customer would be charged Shs13,500 down from Shs4,000 while those depositing Shs2,000,001 to Shs5m would pay Shs16,500 from Shs5,500.
Ms Justina Ntabgoba, the MTN senior manager corporate affairs, yesterday told Daily Monitor the new rates had been informed by a review that sought to align mobile money to bank transactions with the current market conditions.
However, she did not explain the market conditions but said in an email the review sought to improve value proposition and they had already notified “customerc and the regulator in line with consumer protection” guideline.
Mobile money to bank transactions, currently accommodated on the mobile wallet platform, had been exempted from the 0.5 per cent mobile money tax, which was implemented in July last year.
The mobile money industry continues to be weighed down by taxes and a number of charges, which have subsequently affected transaction volumes.
Ms Sumin Namaganda, the Airtel public relations manager, yesterday said they were yet to make any charges.
However, she said, they would “communicate any changes as they arise” adding that they were “committed to competitive but affordable market rates that deliver quality services to the consumer.”
Mr Wilbroad Owor, the Uganda Bankers Association executive director, said the increment was a very unfortunate decision.
“We do not see justification for tripling the mobile wallet to bank rates because this works against the objectives of national financial inclusion,” he said.
Honest conversation. According to Ms Rashmi Pillai, the Financial Sector Deepening Uganda programme director, the increment does not help financial inclusion, saying “there is an urgent need for a more honest conversation between government and the financial players to level the playing field”.
Issues of Competition. Mr Godfrey Mutabazi, the Uganda Communications Commission executive director, said: “MTN’s mobile money is a business like any other. But then when you cross the border and do business with banks, its another regime which is competing with them. Therefore for them not to lose out is the reason they want banks to pay.”
However, he said, they would look into the rate of increment with the view of intervening if it is unfair.