High charges by telecoms threat to Fintechs - players
Stakeholders in financial technology (Fintechs) have said high charges by aggregators, such as telecoms are a threat to business.
Speaking in an interview last week, Mr James Mukasa, the chief executive officer of MoneySent, a remittances and payments Fintech, said that whereas there has been growth in the sector, there is discontent among Fintechs due to high charges by telecoms for aggregation and use of their infrastructure.
The Fintech space has grow tremendously in the last five years with a recent study of the State of Fintech indicating that there are more than 100 Fintechs in Uganda offering payments, digital lending, micro credit, remittances and digital wallets, among others.
Mr Joseph Abdi, the Jpesa chief executive officer, said following the enactment of the 2020 National Payment Systems Act, which separated mobile money from telecom services, contracts of most Fintechs have been reviewed, introducing high charges.
For instance, he said that whereas individual customers are charged between 2 percent and 2.5 percent per transaction, Fintechs are charged 3.5 percent or more.
However, Mr Japhet Aritho, the Airtel Mobile Commerce managing director, said that whereas Fintechs complement mobile commerce, telecoms can only complement where “we feel we are adding value to each other and compete where we feel we are offering almost similar products, noting that “regulators need to create a levelled playing ground for telecoms to ensure that their platforms are available to all Fintechs”.
Fintechs, through initiatives such as 40 Days 40 Fintechs organised by HiPipo in partnership with Level One Project, ModusBox, Mojaloop and Crosslake Tech and supported by the Gates Foundation, which will be concluded this week, are seeking solutions to such as challenges.
Mr Innocent Kawooya, the HiPipo chief executive officer, said telecoms and Fintechs need one another, which calls for measures to accommodate each other for the benefit of end users.
“The majority of these vendors or IT companies are what have evolved to become Fintechs. They have always partnered with and served telecoms. The fact that they always co-existed is a clear testimony that they can still partner to create favorable rules and rails for innovation,” he said.