Review charges on mobile money transactions - E-banking expert

Mobile money service providers must review the charges made on transactions if the much talked about financial inclusion will be a reality, an Electronic banking expert, Mr Ebenezer Yalley, has urged.

According to him, the advocacy of deepening financial inclusion would suffer a major blow if high charges are associated with the same service which is meant to ensure the “unbanked” enjoy simple and convenient banking services via mobile money platforms.

Mobile money customers and patrons have in recent times expressed their displeasure on the high charges associated with transferring funds on the platform.

According to most customers, the double charges they endure from sending funds and the charge on withdrawing the same funds is a disincentive for use of the service.

The charges which range from between 1-2.5 percent depending on the Mobile Network Operator platform and the threshold of the funds being sent, has been viewed as expensive, compared to local banks' fund transfer services which do not attract similar charges.

It is important to recognize that financial institutions hold all mobile money electronic float which usually provides a means for the acquisition of electronic- float income which a mobile money operator can benefit from to allow for the scrapping or reduction of the high charges borne by customers.

Some subscribers have gone to the extent of comparing mobile money serives with that of banking services.

According to them, other comparable bank services are for free or attract fixed charges of lower amounts.

The one percent charge implies a transfer of GH¢1000 would, for instance, attract a fee of GH¢10.

The telcos have justified the charges on mobile money transfer services, saying it is a standard rate for defraying service costs.

"The one percent is standard industry practice across all the mobile money platforms that we have had the opportunity of interacting with. It sort of meets some industry standard to meet the basic overheads of the service," MTN’s Head of Mobile Financial Services, Eli Hini explains.

The overheads, he maintains cut across a number of things, noting that “the first and most important is the distribution network of our agents because these agents need to be incentivised to be able to continue the service.”

Mr Hini explains further that even before the one percent is charged to the customer, just by the fact that the customer must put money in their wallet, the agent makes a commission to motivate the agent to keep money in their wallet.

"From that premise, the agent is also expected to earn money any time the transactions are performed. There is also the education part of the service because we put a lot of educational materials together," he said.