A long hiatus, but now I’m back! I’ve been a bit swamped with teaching and travel – but still there’s so much going on here that I want to share.
One thing I’ve noticed recently is that the MTN Service Center has become swamped lately – there are frequently crowds of people there waiting in line. And the explanation is MTN Money, a program that was launched early this year (or was it late last year?). Similar to SimbaCash, MTN Money allows people to send up to 1 million Uganda Shillings at a time (approximately 500USD) to people with identification and mobile phones (either on the MTN Network or on other networks) for a small fee via an MTN Money agent. It’s less expensive than Western Union, and more accessible than banks.
The fee schedule is graded based on the amount of money being transferred, and generally paid by the reciever, unless they aren’t registered as an MTN money user, in which case, it is paid by the depositor in advance and is moderately cheaper.
- Sending UGX to a Registered User: 800 UGX
- Sending UGX to a Non-Registered User
- 5000-30,000: 1600
- 30,001-60,000: 2000
- 60,001-125,000: 3700
- 125,001-250,000: 7200
- 250,001-500,000: 10,000
- 500,000-1,000,000: 19,000
- Withdrawal of UGX by a Registered User
- 5000-30,000: 700
- 30,001-60,000: 1000
- 60,001-125,000: 1600
- 125,001-250,000: 3000
- 250,001-500,000: 5000
- 500,000-1,000,000: 9000
- Withdrawal of UGX by a Non-Registered User: 0 UGX
There’s a daily limit of 1 Million UGX, an a maximum balance of the same, which probably helps put a cap on how much cash the agents are expected to carry on a daily basis. The minimum transaction is 5,000, and there is no minimum balance.
Who is the market for Mobile Money users? Well – car conversations here tell me that the competition being killed first is Western Union – it’s much less expensive to transfer money than Western Union, and that they will have to bring their prices down to compete. So families sending money back to the village may use MTN Money now instead. Another friend needed to send money to his wife last weekend – after the banks had closed. MTN was still open, and so despite the fact that she was not yet registered as an MTN Money user he was able to send her cash – also he was not happy to learn that it would cost him more money to send cash to non registered users than to send money to registered users! Perhaps it would comfort him to realize that the overall transaction cost was lower…
Are they competing with banks? Unclear to me. It’s not the banks’ core service to offer money transfer services – often they don’t charge for within-bank transfers. Indeed – ATM withdrawals cost me 500UGX and although my bank account might only usually have about 1M UGX in it and doesn’t charge fees, I think most banks make their money off of fees and other services. This is filling a gap for a market that wasn’t quite being served, perhaps due to the identification restrictions common for the larger banks. It’s difficult to open a bank account here without a letter from an employer and a show of regular income.
I’m curious to know also how MTN Money will fare in more peri-urban areas, and how it can be accessed by more rural users.