Mobile Money Charges Reduce in Uganda

Telecommunication giant MTN Uganda has slashed the rates for customers withdrawing money over the mobile money network. In a circular, MTN said the lower fees price took effects in November. The new rate schedule will see clients withdrawing slightly large sums of money pay a lot less in charges.

Nevertheless, the telecom giant will now charge sh13, 000 and sh1, 000,000. Those withdrawing between sh 30,001 and sh45, 000 will pay sh, 350 demanded previously. MTN did not detail the reason behind the reduction in fees, but the move expected to shore up its transaction volumes. The notice report reveals 0.5 percent tax of transaction value would be charged on all transactions urging customers not pay any mobile money agent after transaction fees are deducted directly from your phone. In 2018/19, the Uganda government introduced a 0.5% tax on mobile money withdrawals a move which caused a lot of criticism from users.

Meanwhile, Uganda Revenue Authority (URA) data indicates that the levy on mobile money contributed a deficit of sh 59.99 billion in the financial year of 2019/2020. URA attributed this to the fact that high-value customers withdraw their funds to agency banking. MTN Uganda revealed to URA that its mobile money transactions had dropped as customers turned to banks to avoid tax. MTN has had a drop of 36% in mobile money transaction values in the first half of the financial year 2019/20. Besides, other clients adopt mobile money as a mode of payment for services instead of withdrawing for cash. URA both the tax and the high fees by telecom firms made it too expensive for high-value clients to withdraw money using the platform. The volume of mobile money transactions across networks grew to 3.1 billion compared to 2.5 billion in 2018/19, representing a 22% increase. This is according to the bank of Uganda’s annual report for the 2019/20 information.

Meanwhile, the value of transactions processed on the mobile money platform increased by 19.10% to sh79.7 trillion compared to sh66.9 trillion in 2019. In contrast, the number of active users for mobile payments increased by 12.9 percent to 17.5 million in the year under review from15.5 million in the previous. However, the telecom giant’s move to cut the fees for withdrawing through mobile money account will positively impact the Uganda iGaming betting and gambling, which is the most popular medium of payment for sports betting enthusiasts in Uganda. This development is to encourage customers to continue using the MTN mobile money service in Uganda.

Mobile money the first choice for the underserved group, and the penetration growth as been link to its democratization and its quick adoption of the services, which turns out to be the popular medium of tools for payment in Africa and it is integral to the exponential growth of iGaming betting and gambling in Uganda especially during the related lockdown amid Covid-19 outbreak in the country. In a few months, customers’ behavior is expected to shift their attention back to Uganda’s mobile money service that experienced decline in revenue.

About Post Author

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.