Extra levies slow adoption of mobile payments

NAIROBI, Wednesday

With over 18 million mobile phone money service subscribers, transferring more than $600 million between July and September, 2011, mobile money payments is undeniably a vibrant business.

However, the mobile money payment has failed to pick up as expected with both consumers and businesses still preferring cash.

This is despite the fact that several firms have partnered with mobile telephony firms to offer money services.

Critical among things stalling the adoption of m-payments among Kenya’s 26.9 million mobile phone subscribers are high charges for using the services. It costs between Sh25 and Sh100 to use m-payment services. One pays an extra Sh25 to settle utility bills like water and electricity.

"This is too high for many people especially when they can readily access cash payment options," Graham Ngeno, a marketer in Nairobi said.

According to Ngeno, it is expensive to pay up to Sh42 on top of one’s bill every month for the sake of convenience when you can walk into a post office and pay for the service without additional charges.

"Consumers should pay less with technology and not more," Ngeno said, adding that paying high fees for m-payment service is self-defeating if the aim is to encourage many people to adopt the system.

"This way, the system punishes those who adopt m-payment technologies and rewards those who stick to old the system," he says.

"With these extra levies, companies do not see that greater use of m-payments, yet its helps them cut on costs of retaining cashiers."

To boost mobile money payments, Ngeno said consumers should pay no more than Sh5 per transaction.

"If for instance utility firms did this, the huge queues at their offices will cease," said.

"Some of those queuing simply want to confirm their bills yet they can do it and pay through their mobile phones if the charges are not prohibitive."

—Xinhua