14 May 2018

Uganda: Telecoms Cut Mobile Money Commission

Kampala — Telecommunication companies have cut agent commission for both airtime and mobile money services.

In a message sent to Airtel agents, the telecom noted it had revised agent commission for both deposits and withdrawals.

For instance, according to the message, an agent will earn Shs10,000 for a Shs4m or Shs7m deposit down from Shs12,000.

Similarly, a vendor will earn Shs15,000 for a withdrawal of between Shs4m and Shs7m down from Shs16,500. The revision will affect all transaction ranging from Shs2,510 to Shs7m.

The telecom has also increased transaction amounts from Shs5m to Shs7m as they seek to match current economic fundamentals that have seen a rapid growth in mobile money usage.

Online airtime sales

In an email, the telecom also indicated that it had revised commission structure for online airtime vendors to 5 per cent down from 7 per cent for distributors as it seeks to promote the sale of airtime through mobile money ahead of the June 30 total ban on scratch cards that was announced by Uganda Communications Commission (UCC) in March.

"Following the UCC directive of zero scratch cards after June 30, we are promoting Airtel Money which serves both airtime top up and Airtel money transactions. The new commission structure has therefore been re-aligned to match commissions earned by Airtel money agents selling the same product (electronic airtime)," the email reads in part.

Retailers will earn only 4 per cent from online transaction down from 6 per cent, according to the new structure.

Daily Monitor could not independently verify the revisions. Ms Faith Bugonzi, the Airtel public relations manager could not furnish us with details of the revisions by press time.

Mr Olivier Prentout, the MTN chief marketing officer, is expected to address a press briefing today where he will communicate a raft of charge in the company's mobile money regime.

Asked about the impeding changes, Mr Val Oketcho, the MTN communications and corporate affairs manager, asked that we wait for the press briefing today.

The revisions come at a time when government has proposed a number of taxes in regard to mobile money services, a key transaction platform for a number of Ugandans.

For instance, government has proposed an increase of mobile money Excise Duty from 10 per cent to 15 per cent. Government has also proposed to introduce a 1 per cent tax on all mobile money transactions in the 2018/19 financial year.

According to data from Bank of Uganda, there are about 142,937 mobile money agents transacting about Shs54 trillion annually.

Mr David Makumbi, an Airtel Money agent, told Daily Monitor at the weekend that the revisions will eat into his operations and income.

This, he said, had already affected his income and expected targets.

"We are doing badly compared to how we used to do in the past. Nowadays the commission is too small and I do not know why," Ms Doreen Namuto, a mobile money agent, said.

However, she said, she had had good income from selling electronic airtime through mobile money contrary of scratch cards where she would earn Shs300 for every Shs10,000 airtime.

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