Last week, the country’s biggest telecommunication company MTN Rwanda, through its Fintech subsidiary, Mobile Money Rwanda Ltd, announced it has reintroduced the levy on transactions done via its platform Momo Pay. Momo Pay has recently gained traction mainly since the outbreak of Covid-19 early last year as the government moved to encourage cashless payments to avoid the spread of the deadly virus. Telcos agreed to scrap charges on these transactions as a way of incentivizing cashless payments which translated into significant uptake of the platform including by merchants who initially had them but were being discouraged to use them because of the commission charged to them on every transaction. Much the customer is still protected and will not incur any charge, Mobile Money Rwanda will now be charging the merchant 0.5 per cent on every transaction (above Rwf4000 )made through the platform. According to an announcement by MTN Rwanda, the new charge is lower than what it was before the Covid-19 outbreak, since they were charging 1 per cent for every transaction. There is no doubt that this will be opposed by merchants, who are reeling from the pandemic and this is not without reason. We are probably going to see merchants shunning the platform and encouraging customers to use cash. It is understandable that for a profit-making company, you cannot continue to offer the service at no cost. However, this will most likely set us back on many fronts; it will set us back on gains made towards using cashless payments, but also frustrate the effort to contain Coronavirus, which is still very much in our midst. It is our considered view therefore that the operators meet with the regulators, which in this case is the National Bank of Rwanda (BNR) to come up with a formula that caters for the interests of all involved – the customers, the telcos and the merchants. One of them can be some sort of incentives to help telcos offset this cost.
