MTN Uganda has finally started it’s cell phone-borne money transfer service, injecting a much needed dose of competition into the hitherto staid market and allowing richer urbanites across the country to send cash to their relatives and friends trapped in searing rural poverty.
At the launching ceremony in Kampala on Tuesday evening, BoU governor Mr Tumusiime Mutebile said MTN Mobile Money was a landmark product and “would place Uganda at the forefront of innovation” in using mobile communications technology to revolutionaries rural finance.
To transfer money, a customer will have to first open a mobile account with MTN at any of the company’s dealers. Customers are given a secret code when they send money and they are required to send that code to the recipient for presentation at a payments points. Mr Isaac Nsereko, MTN’s Chief Marketing Officer said they have over 600 transactions points across the country where money can be sent or received. The service will work across networks.
Although the money transfer market has been thriving in Uganda, activity there has largely remained spotty and growth has been tepid, stifled by usurious charges.
Some companies levy as high as 10 per cent of the amount being sent. Mr Nsereko didn’t specify what exactly MTN would charge for its service but signaled that they intended to keep tariffs as low as possible.
MTN’s entry into the market is expected to depress business for some of the key players like Post Bank that have been controlling a sizeable chuck of the marketshare. MTN wouldn’t disclose how much it invested in the product but put in millions of dollars.
Last week, Zain simultaneously launched their own mobile money transfer service in Kenya and Tanzania called Zap and it’s expected to be launched in Uganda soon.