Cost of using mobile money in Nigeria

Posted by Felix Okoli on Monday September 2, 2013 at 16:14:34:

In Nigeria, mobile money services are still growing and there are not many people who have yet subscribed to the service compared to the number of people who are GSM subscribers.

A lot of money in Nigeria is unbanked and there is a lot of cash exchanging hands on a daily basis, mostly at local markets nationwide. Although, mobile money banking was meant to make it easier for Nigerians to save money in the bank, it is not yet fully accepted in the society but it is growing slowly.

One of the benefits of using mobile money to me is that it has saved me the stress of looking for recharge card vendors or an ATM any time I want to recharge my sim. With mobile money and money in my account, I can do this anytime. However, I've noticed that there are some fees associated with using mobile money and decided to write about some of them here.

Some costs associated with using mobile money in Nigeria
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1. Loss of interest on savings: As I've noticed, there are really no interest on your savings once you have put in money into your mobile money account. If you put in say N30,000, it doesn't earn interest for you unlike if you had put the money in a savings bank account.

2. Withdrawal fee: This is mostly a consistent cost of using mobile money. For most times when you make a withdrawal from your account, called a cashing out, you may pay a fee for doing so. It is a variable cost and I think it is at around N100 per withdrawal at least. It seems some banks are free for ATM withdrawals but may charge for agent or branch withdrawals.

3. GSM costs: Since Mobile money normally works with GSM services such as USSD or internet data, there is a cost you may incur when using their platform. I'm using MTN USSD code for StanbicIbtc and it costs me about N2 per message. Data costs occur when you use the mobile internet and this is at around 5k per kb for most networks.

4. Service costs: Banks or agencies who hold your funds may charge a service cost for using their platform. It may be fixed or vary with the number of transactions you do. As at the time of this post, there are no service costs I know of from banks I've used.

5. Deposit fee: This is a fee that could be charged to your account each time you make a deposit or deposit below a required minimum amount. It is free for most providers I've seen for now.

6. Transfer charge: This is a charge that is deducted from your account when you transfer money to another person using mobile money. It may be a fixed charge or vary with the value of the transaction. Most providers charge for this.

7. Mini statement fee: There is also a fee for requesting for your mini statement from your provider. I think the cost now is at about N10 per request.

How to reduce costs associated with using mobile money
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- Avoid sending money if you can or send in bulk
- Pay the bills of your beneficiary directly rather than sending them money to do so. Paying bills is free with mobile money
- Top up airtime of your beneficiary directly rather than send them money do do to. It is free.
- Avoid depositing below the free minimum amount
- Read through the terms associated with your mobile money service to better understand the costs associated with the service.

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Re: Cost of using mobile money in Nigeria Reply by geff on Monday October 14, 2013 at 1:44:43:

can we get the actual charges for the above transactions?




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