UGANDA: Telecoms harmonise cross network mobile money charges

Uganda Communications Commission (UCC) has said MTN and Airtel have successfully completed the harmonisation of cross network money remittance charges during the second quarter ended June. 

In a report covering April to June, UCC said that in a market first, Airtel Money and MTN Mobile Money had reviewed their cross network person-to-person remittance charges to equalise them across the two networks. 

“The quarter saw the harmonisation of Airtel and MTN mobile money cross network remittance charges. Consequently, MTN and Airtel [now] have uniform cross network transfer rates,” the report noted. 

UCC had previously indicated that whereas telecoms had recorded growth in on-net mobile money transactions, there was low growth for cross next work transactions as users avoided high cross network mobile money charges. 

The charges, which were almost double the harmonised rates, had remained a serious impediment to growth of mobile money services

Mobile money, as of June, according to UCC had grown to 40.7 million digital wallets, of which 36.9 million were mobile money wallets linked to mobile network operators, while 3.8 million or 10 percent were administered by licensed non-mobile network operator payment service providers. 

Mr Richard Yego, the MTN Mobile Money managing director, said yesterday the harmonisation had seen MTN reduce tariff tiers by between 40 percent and 50 percent.

For instance, he said, the harmonisation now means that customers, who send Shs60,000 - the largest percentage of MTN’s customers threshold - are now charged Shs1,500 to send money to Airtel compared to Shs3,000 previously. 

“Before very few customers used to send money across networks because it was too expensive. This is why some customers kept on saying do you have an MTN line or an Airtel line before making a decision to send money,” he said, noting that the uniform charges had impacted MTN’s number of unique users, growing from just 40,000 in April to more than 100,000 while transactional values have since more than tripled. 

Mr Yego also revealed that cross network and on-network charges are expected to reduce further with the expected launch of the Bank of Uganda National Switch mid next year.  

The harmonisation, which has been a long standing cry, was first announced in April. 

It is expected to be key driver for digital payments as Uganda seeks to achieve a cashless economy. 

In an email inquiry, Mr David Birungi, the Airtel public relations manager, told Monitor yesterday that the telecom had “seen improvements in the experience of our Airtel Money customers”, noting that “Airtel continues to invest in solutions that make it easy for our customers to transact instantly”.