MTN and MoMo agents in bed over new cash out fees

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Momo Vendors
Momo Vendors

Mobile Money agents in the country have said that they were party to the recent decision by MTN Mobile Money Limited (MML) that the maximum fee for cash out transaction will go up by 100% from GHS10 to GHS20 beginning July 1, 2023.

MTN put out an SMS circular announcing the new decision, which has been received with widespread public complaints about MTN not being fair to customers, particularly after raking in over 13 million customers, on the back of whom it has been growing its mobile money revenue annually.

But the Executive Secretary of the Mobile Money Agents Association of Ghana (MMAAG), Evans Otumfuo has said that the decision to increase MTN mobile money cash out transaction fees was a joint one by MTN and the MoMo agents across the country.

He explained that from the time MTN first introduced mobile money in the country till date, service fees have not been reviewed. As a result, the commissions paid to agents have also not been reviewed.

According to him, this is happening in the face of ever-increasing operational cost, plus the fact that value for agents have been hugely depleted because thousands of Ghanaians have entered the space and the competition has become even tighter.

“So due to our increasing overheads and the huge competition in the market we approached MTN to increase our commissions and the consensus we reached was to increase the service fees on cash out transactions so that we the agents can also make some profit from that to sustain our businesses,” he said.

Evans Otumfuo therefore prayed Ghanaians to “please understand this for us and keep patronizing mobile money cash outs so we can stay in business and keep serving you.”

Indeed, ahead of this new decision by MTN, mobile money agents on their own found a way to compel customers to cash out only up to GHS1,000 at a time. Any amount above GHS1,000, the usually refused to do the cash out because they didn’t make any extra commission on that beyond the GHS10 charged for up to GHS1,000 cash out.

It would be recalled that in April this years, all the major mobile money agents associations in the country, came together and made a presentation to MTN with their grievances, demanding for increases in commissions, transparency in fees reconciliation, and prompt payment of commissions among other things. They threatened to go on strike on May 10, if nothing was done about their complaints.

Hitherto, the various associations worked in silos and so it was difficult for MTN to address their issues, as each group had their own set of complaints and it therefore did not make business sense to have different conditions for different sets of agents.

MTN alone has about 400,000 mobile money agents and merchants across the country. Increasing commissions for that huge number of agents will affect the bottom line of any business. It would therefore appear that MTN and its agents have decided to pass the burden on to customers, in spite of the fact that MTN continues to grow mobile money revenue considerably.

Meanwhile, some industry watchers have said that, MTN should have progressively shared some of the its mobile money revenue with its agents over the years without burdening customers, particularly as the country goes digital and more Ghanaians adopt digital finance.

Transfer fees

It is worthy of note that, in the main, transfer fees are going down and are expected to go further down as adoption and usage increases. Vodafone Cash and GhanaPay have now zero-rated transfer fees, while MTN, the market leader has reduced same from 1% to 0.75%, particularly to cushion customers in the face of the government’s obnoxious e-levy on majority of digital transfers.

So, whereas e-levy does not affect cash out transactions, MTN seem to tilt towards discouraging cash out transactions and encouraging more transfers to ensure the money stays on the digital platforms so the industry will be sustained.

MTN is yet to give an official explanation to the decision to increase cash out transaction fees, and the industry regulator, Bank of Ghana (BoG) is also yet to respond to queries about its regulatory direction on the decision.

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