Kampala Picture those days when you had to spend Shs10, 000 on bus fare
to deliver just Shs20, 000 to a relative. On the other hand, imagine
the long queues in the banking halls when you want to pay utility bills
or your child’s school fees.

The advent of mobile money, a platform which allows people to use their
mobile phones like wallets to transfer money, pay for goods and
services and conduct banking services, has started to have a
transformative effect at a faster pace than previously envisaged.

The massive uptake of the mobile commerce platform as opposed to
traditional banks can be explained by the rapid growth of mobile phone
penetration, creating a fertile ground for service.

With a population of about 32 million people, Uganda has over 10
million mobile phone subscribers and only about three million bank
account holders. The platform took advantage of the extensive reach of
mobile phones to improve financial access and bring a good number of
people into the formal banking system. The service rides on Zain’s Zap,
Uganda telecom’s M-sente and MTN’s Mobile money.

Mr Brandon Semanda, the Zain Uganda marketing manager says the telecom
has about 140, 000 active clients using Zap and over 1.4 million
customers with enabled sim cards. Whereas Uganda Telecom’s M-sente has
a subscription of about 29, 510 as of August 8, 2010.

The convenient, flexible, low cost and instantaneous nature of the
platform has led to its swift popularity among Uganda’s banked,
underserved and unbanked population. Mobile money acts as a mobile
wallet allowing users to utilise their mobile phone in much the same
way as a bank account debit card.

Using the mobile phone as a bank account, it does not only reduce the
need to carry cash, but also enables users to purchase airtime, pay
utility bills including water, electricity and DSTV services, pay
school fees, pay for merchandise, send money from the comfort of one’s
office or home.

Zap moves an estimate of over Shs2 billion monthly and the average
amount sent per transaction is between Shs50, 000-Shs500, 000.

Mr Mark Kaheru, Uganda telecom’s relations manager says as of August 8,
M-sente moved an average of Shs75 million per week, an average of Shs43
million was withdrawn per week and airtime worth Shs2.5 million
purchased.

The platform has been taken up by many people, especially the unbanked
as a substitute of a savings account, which enables them to deal with
unexpected expenses such as medical treatment.

The maximum transfer amount per day is, however, Shs1 million and the
maximum balance one can hold on the account is Shs1 million. Thus,
sending money using mobile money is much cheaper and faster compared to
the slow and costly transfers via banks, traditional money sending
agents.

Players say the novel product that provides the most comprehensive and
accessible package of mobile commerce is slowly changing Uganda’s socio
- economic landscape.

Mr Kaheru says the platform has made business transaction easier and
that there is more money flowing in from upcountry districts to Kampala
to purchase goods and agriculture equipments thereby increasing trade.
“People no longer need to board buses to come to Kampala to trade, they
simply send money using phones to someone they trust here who buys and
sends the goods back to the person,” Mr Kaheru adds.

The low rate of sending and receiving money saves money that would have
been used in bus fare and the huge transaction charges and time that
would have been spent on the way or in the long queues there by
allowing people to concentrate on their businesses for increased
profits.

Zap subscribers pay between Shs250 and Shs5,000 to send and receive
finances of between Shs1-Shs1 million. None-registered users pay
between Shs200 and Shs2, 000 for sending and Shs1, 000 and Shs5, 000
for withdrawals. MTN’s registered users pay Shs800 to send any amount
of money irrespective to any part of the country and between Shs700 and
Shs9, 000 to receive cash depending on the amount.

Non-registered users and those using other networks pay upon receiving
a withdrawing charge, which varies between Shs1, 000 and Shs19, 000.
“The impact of mobile money services may be minimal now but in a few
years, a huge impact will be seen,” Mr. Semanda says. Through the
service, Zain has created jobs to over 4,500 Zap agents across the
country.

Users are also able to keep track and manage their finances through
handsets for instance checking account balances, changing passwords,
nick-names and getting bank information and reports. With Zap, one is
also able to purchase airtime at no cost.

To use any of the service providers’ facility, one needs to register
his personal details with respective service provider. The Sim card is
then automatically registered upon providing the required details.
Registered users get codes to enable them access the service menu, from
which they choose the type of transaction they want to carry out on the
mobile phones. Upon transacting, the intended recipient receives a text
message notifying them of the amount of money received within or less
than five minutes.

A secret pin code is also sent to the recipient to enable them retrieve
cash from the nearest service provider’s service point. “All
transactions are carried out using a password to ensure that customers’
money is safe and secure,” Mr. Semanda adds.

The service involves the use of a bank and as such, many telecoms have
partnered with different international and local banks to do business.
According to information available, Warid Telecom is also expected to
enter the market after partnering with Obopay.

Currently MTN has about I million Mobile Money customers moving about
$22 million per month. The platform was first introduced by Safaricom
with the M-PESA product in Kenya two years ago and it has over 11
million registered users. One can use M-PESA to purchase air tickets in
Kenya.
 

 

 

 

 

 

 

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