KAMPALA — Telecom giants, MTN Uganda has slashed mobile money sending fees by half as competition in the industry bites.
The new rates take effect Saturday, September 7, 2019, and apply to only those sending from MTN to MTN network.
In a notice shared to this website, the company shows some figures cut by more than a half.
For instance, one sending between UGX 500,001 to UGX7,000,000 will be charged a uniform fee of UGX1,500.
This is down from UGX2,200 Shillings charged previously while sending UGX5001 to 500,000 will be charged between UGX500 and 1,300.
The Charges for sending to other networks and withdrawing have not changed.
Last month, Bank of Uganda Deputy Governor Dr Louis Kasakende expressed displeasure with the high charges by telecom companies to people sending and withdrawing money.
“I must express our displeasure at the relatively high charges being imposed on some of the financial solutions,” he told a gathering in Kampala
He added that mobile money charges for sending monetary value within the same network in Uganda are currently about double the applicable rate in Kenya and Tanzania if the local Shilling rates are converted into US Dollar terms.
Telecom companies are looking to reduce on the charges to entice more people onto the network but also make others send money more frequently.
Mobile Money has continued to grow and evolve into a mainstream method of payment for goods and services, facilitating seamless banking transactions and tax payments; payment of utility bills, allowing parents to pay their children’s school fees and simply paying for food and for MTN products and services, as well as purchasing products online.
A large number of people excluded from the formal financial system was a fertile ground for the seed to germinate. Prior to the introduction of the platform, for instance, one would spend UGX10,000 on bus fare just to deliver UGX20,000 to a relative in a village or join a long queue in banking halls to deposit money, but that is no more unless one wants it that way.
The massive uptake of mobile money, as opposed to commercial bank services, is explained by the rapid growth of mobile phone penetration.
This is currently estimated at 23.2 million as at September 2018, according to the Uganda Communications Commission (UCC).
Statistics Overall, 87% of all mobile money to/from bank transactions are facilitated by MTN Mobile Money. In addition, over 35,000 subscribers majorly in rural Uganda access solar power by using MTN Mobile Money to pay. The growth of MTN Mobile Money has been unparallel.
The integration of financial services into the Mobile Money portfolio has seen the service not only drive financial inclusion but has also boldly cemented MTN’s influence as the leading financial services provider in Uganda.
Digital world Mobile Money is backed by breakthrough technology that offers a complete end-to-end customer experience enabling real-time transactions and can seamlessly replace cash.
Today, MTN Mobile Money has completely become digital. If you own a smartphone as a mobile money subscriber, you can simply download the new MyMTN Mobile Money App to get a fully digital experience for all MTN Mobile money transactions. MoKash MTN still pioneered the mobile money savings and loan product – MoKash, in partnership with Commercial Bank of Africa (CBA).
The 2018 FINSCOPE survey indicates that 23% of Ugandans save money on the mobile money platform, compared to 11% who save with commercial banks. The report also indicates that financial inclusion rose to 78%, representing 14.4 million Ugandan adults, mainly due to mobile money services.
Thus, the platform took advantage of the extensive reach of mobile phones to improve financial access and bring more people into the formal banking system. The mobile money platforms ride on mobile networks and this called for regulatory collaboration with the UCC — the industry regulator and Bank of Uganda (BOU), the financial services industry supervisor since mobile money transactions involved sending and receiving money.
Uganda is one of 19 markets that have more mobile money accounts than bank accounts, according to the Global System for Mobile Communications Associations State of the Industry reports, 2016 and 2017.
They indicate that 56% of the adult population in Uganda is mobile money users, but only 11% have bank accounts, either jointly or individually.