Over the past few days, the cost of digital transactions has caused a stir among users with most terming them as prohibitive and unjustifiably expensive. 

Transferring funds from one’s bank account to their Mobile Money wallet colloquially termed as ‘pull’ has been one of the most charged transactions. Amid the debate, The New Times set out to understand pricing from Bank of Kigali.

Among top local and regional banks operating in Rwanda, Bank of Kigali has the lowest tariff, in transferring funds from one’s bank account to their mobile money wallet (pull).

For transfer of amounts up to Rwf 500,000, one incurs a Rwf 200 while in some banks, the same transactions could cost up to Rwf 5000. The transfer of funds from mobile wallet to one’s bank account (Push) is set by Telcos with banks having no say in it.

At Bank of Kigali, the process of pricing of various products is spearheaded by the Business Intelligence Department which manages the strategy and consequent implementation based on data.

Barnabas Kalenzi who heads the Business Intelligence Department told The New Times that pricing for various service and product offerings is informed by data collected internally and through market research together with the strategy as opposed to prior investment as is common practice across the market.

"It involves collecting data to establish reference points, undertaking thorough market research, assessing relationships with clients as well as understanding how to link pricing to allow uptake of products and service,” he said.

He added that the service's pricing is also linked to the bank’s mid-term and long-term strategy which is currently hinged on digital transformation.

"As market leaders, we cannot have a nonchalant attitude towards pricing, it also cannot be a mechanical response to market benchmarks. We look at pricing as a strategic instrument built to safeguard market position, grow customer loyalty as well as take advantage of the emerging opportunities,” he said.

In going about enabling ‘push and pull’ transactions, he said that the bank engaged with telcos as partners as opposed to competitors to integrate to allow transfer of funds between bank accounts and mobile wallets.  

"We choose to see this as an avenue that will improve convenience for users and hence priced it affordably at Rwf 200, for transactions from bank account to mobile wallet of up to Rwf 500,000,” Kalenzi noted.

The pricing is also aimed subtly directing clients to consider increased uptake of digital payments as ‘pull’ costs are comparatively cheaper than over-the-counter withdrawal as well as ATM withdrawal.

The Business Intelligence department's ability to embed analytics across their operations has enabled them to have a 360-degree view of their clients’ trends and consumption behavior and consequently insight on ideal pricing.

While the bank has made investment in mobile banking system development and maintenance, they say that their strategy involves looking at things from a big picture to improve chances of attainment of mid-term goals as opposed to solely recouping investments.

"We strive to apply a pricing mechanism that is not reactive to the competition or driven by recouping investments,” he said.

From their engagement with clients and research, Kalenzi said that they have learnt that clients are increasingly demanding greater service, transparency, affordable pricing and multiple options.

In response to demand for multiple options and avenues, the bank also has other approaches such as agency banking (with over 2500 agents countrywide), Mobiserve (uses USSD), internet banking and mobile app that allow bill payments and transfers, POS machines, instant Mobile Loans as well as the latest ATMs that allow deposits.

Bank of Kigali’s quest to grow digital payments has also seen them avail an e-commerce gateway to enable businesses to sell merchandise and services online.