Africa’s mobile money pricing systems need fixing
Posted Monday, March 21 2011 at 00:00
Four years ago, Safaricom, Kenya’s biggest mobile operator launched M-Pesa in the country — the first mobile payment scheme in Africa — opening a floodgate for similar services across the continent.
South Africa, Madagascar, Uganda, Côte d’Ivoire, Senegal and Tanzania are among countries in Africa offering mobile money transfer services.
However none of the payment services in these countries have attained the depth and reach that Safaricom has, analysts say.
On top of standard transfer services, the mobile operator also offers international remittance services, bank accounts, utilities payments, purchases facilities, cash cards — in short, all the services that you expect from a traditional retail bank.
However, pricing structures governing payment services to be improved.
Joining the payment scheme offered by any of four mobile phone operators — Safaricom, Orange in Côte d’Ivoire, Telma in Madagascar and MTN in Uganda — is free.
However, a customer might need to swap an existing SIM card for a new one in order to use the payment services.
At MTN Uganda, the SIM card swap is free for post-paid customers but prepaid customers will have to pay Ush1,500 ($0.64).
Telma proposes a SIM swap at slightly over 2,000 Ariary ($1).
However, all four operators have restrictions on the payment services in favour of their own subscribers.
This only encourages multi-SIM ownership. If a customer is not a subscriber of MTN Uganda or Orange Côte d’Ivoire or Telma Madagascar or Safaricom in Kenya but wants to use their mobile payment service, they will need to get that SIM card.
The “walled garden” commercial approach of mobile operators for payment services gets tougher when it comes to the fees charged for transfers.
The common denominator among the four operators is: If you transfer money to another mobile user registered to the service, the fee is rather small but if you transfer money to a person that is not registered to the service then the fee can be five to 20 times more.
At Telma, transfers to registered mobile users attract 250 Ariary ($0.13) for amounts between 100 Ariary and 5,000 Ariary ($0.07 and $3.7), but it will cost three times more to send the same amount to an unregistered user.