By CHIMPREPORTS
Ugandans have warned that achieving a cashless economy will be a hard nut to crack if telecommunication companies continue to charge exorbitant fees on mobile transactions.
This came after MTN announced the introduction of charges on MoMoPay transactions.
“We carried out a tariff adjustment in the MoMoPay Oil and Gas sector (fuel stations, effective immediately,” said MTN Uganda on Friday.
“Customers will be charged when they use MoMoPay to pay for fuel at all fuel stations that accept MoMoPay.”
For example, fuel worth Shs 30,000 will attract a charge of Shs 650.
Yet, the service has been free for several years, allowing millions of people to subscribe for MoMoPay.
Ugandans took to X to comment on MTN Uganda’s decision to introduce charges on MoMoPay, with majority saying the move would compel them to consider using cash for transactions.
On X, UG Lawyer observed: “No, why would I opt for momo pay where I’m going to incur an extra charge when I have an option of moving with cash where I don’t incur any extra cost. But yes, we’re in the struggle for a cashless economy.”
Ali Ndhote said, “It’s like we’re being penalised for paying using Momo and being encouraged to carry cash.”
Sarah Biryomumaisho noted: “This is why Uganda won’t go cashless anytime soon. Each time we take a step forward, we take 3 backwards. Sad.”
Isaac Ssemmanda said MTN should have introduced a “small standard charge” instead of rolling out tariffs based on the amount of fuel consumed.
Eric Musyoki agreed with Ssemanda, saying, “Why not have a standard charge for using MOMO pay? Why get charged more in some areas than others?”
Financial inclusion
In June 2023, Uganda Communications Commission reported that registered mobile money subscriptions hit 36.8 million at the close of December 2022, indicating that digital financial services continue to be the primary catalyst for financial inclusion in Uganda.
During the first quarter of 2023, the market recorded 1.4 billion mobile money transactions, indicating a 4% growth.
This trend was attributed to the increase of person-to-business (P2B) and person-to-person (P2P) mobile money services as customers continued to adopt cashless payment methods.
According to Bank of Uganda, the value of mobile money transactions significantly increased by 22.6% to Shs 191. 3 trillion in June 2023 compared to Shs 156 trillion recorded in June 2022.
This trend had raised hopes that Uganda is slowly edging closer to enjoying the benefits of a cashless society, especially considering that the Bank of Uganda spends billions on printing money.
Last year, MPs expressed concern over the cost of printing and issuance of money in Uganda which stood at Shs 199bn in the financial year 2022/2023.
Lawmakers urged the Bank of Uganda to instead spend money on sensitising Ugandans to embrace cashless transactions.
However, for Ugandans to fully embrace cashless transactions, charges must be affordable.
Emmanuel Welishe, a marketing consultant, said, “Cash is king. So apparently the whole ploy of promoting momo cashless was to eventually charge people for transactions once they get hooked. One is better off with one single charge off withdrawals and paying cash all through because next year these tariffs will go higher.”
Commenting on MTN’s decision, E Najjuko took to X and asked Bank of Uganda: “Is this the right step to a cashless economy? As a regulatory authority is this a step in the right direction to foster and enable trade.”
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