MTN Mobile Money Service Moves Sh5 Billion in Uganda
The MTN mobile money transfer service has moved over sh5b in about 180,000 transactions since its launch in March. The telecom giant disclosed that over 40,000 people mostly those doing upcountry transactions had subscribed to the service.
Richard Mwami, the head of mobile money, indicated last week that the subscriber numbers for the service were steadily growing. This, he said, was because the service offers an easy payment mechanism akin to traditional banking, which many people did not have access to before.
"The educative part is critical and it takes time for people to understand that their mobile phones can act as a bank and that they can make payments immediately with their monies safe all the time," said Mwami. At the time MTN launched its money transfer service, uganda telecom also announced a partnership with Redknee Solutions Inc. to provide mobile money solutions.
ZAP, a mobile money product of Zain, already operational in Kenya and Tanzania, is also set to become active in Uganda in days.
According to telecom experts, the mobile money transfer service should in the future be able to have a regional platform especially if the East African Common Market takes shape.
In countries where the mobile money transfer service pioneered, the facility has transformed the telecommunication landscape because of its convenience and ability to tap the un-banked population.
It has also spurred rural economies by making more money available to the rural population especially farmers and small scale traders who previously found it difficult to improve their businesses due to delayed payments.
"In Kenya, a similar service (M-Pesa) has been instrumental in accelerating rural economic growth by between 4-5%.
"We expect that MTN mobile money will also help accelerate Uganda's economy by similar margins" said Mwami. MTN mobile money charges a smaller percentage compared to what other conventional service providers charge.
Mwami explained that to transfer sh10,000 and above, traditional money transfer providers charge sh13,000, while the MTN mobile money service charges sh800.
MTN has over 7,000 mobile money outlets countrywide. Less than 20% of the entire Ugandan population is involved in formal banking. This has left telecoms with a great opportunity to cash-in on the huge gaps left by the formal banks through innovative products like mobile money transfers.