MTN Mobile Money agents back double increase in cash out fees amid public uproar

MTN Mobile Money Limited (MML) has declared an upcoming 100% rise in the maximum cash-out fee, shifting from GHS10 to GHS20 starting July 1, 2023. This recent decision, according to the Mobile Money Agents Association of Ghana (MMAAG), was a collective one with the agents throughout the nation.

Public outcry over fee increment

The announcement, disseminated via an SMS circular by MTN, has sparked considerable public dissatisfaction. Critics argue MTN is treating customers unfairly, especially considering the service’s 13 million-plus customer base, which significantly contributes to the annual growth of its mobile money revenue.

Agents defend decision amid rising operational costs

However, Evans Otumfuo, the Executive Secretary of the MMAAG, clarifies that this is the first review of service fees since MTN first introduced mobile money in Ghana. He points out that without such changes, the commissions given to agents have stagnated, even as operational costs rise and market competition tightens due to an influx of new entrants.

Emphasising on the agents’ plight, Otumfuo said, “Our escalating overheads and the immense competition prompted us to approach MTN for an increment in our commissions. The consensus was to elevate the service fees on cash-out transactions, allowing us agents to derive some profit and sustain our businesses.”

Agents seek public understanding and patronage

Otumfuo implored Ghanaians to grasp their situation and continue utilising mobile money cash-outs. This support, he insists, is vital for the agents’ business continuity and their ability to provide service to the public.

Unofficial fee impositions by agents

Ahead of MTN’s decision, agents independently enforced a GHS1,000 cap on cash-out transactions, refusing higher amounts due to a lack of additional commission beyond the GHS10 fee charged for transactions up to GHS1,000.

Agents’ grievances and threats of strike action

In April this year, major mobile money agents’ associations in Ghana presented MTN with grievances over commission increments, fees transparency, and timely commission payments, threatening a strike on May 10 if their complaints went unaddressed.

Before this, individual associations faced difficulties negotiating with MTN due to their unique sets of complaints. With about 400,000 mobile money agents and merchants nationwide, a hike in commission for such a vast number significantly impacts any business’ bottom line.

MTN’s stance and regulatory oversight

MTN and its agents, facing these complexities, seem to be passing the financial burden onto customers, despite MTN’s continuing growth in mobile money revenue. The company has not yet officially explained the cash-out fee increment, and the Bank of Ghana, the industry regulator, has remained silent on its regulatory stance concerning the decision.

Industry observers suggest that MTN could have gradually shared some of its mobile money revenue with its agents over the years, rather than burdening customers, especially as Ghana’s adoption of digital finance increases.

Other service providers lowering transfer fees

Interestingly, while cash-out fees rise, transfer fees are generally declining. Vodafone Cash and GhanaPay have eliminated transfer fees altogether, and MTN has reduced theirs from 1% to 0.75%. These