Deposit Transactions Provide a 'Cash Cow' for Mobile Money Agents.
Contrary to popular belief, the implementation of the Electronic Transfer Levy (E-levy) has created a new revenue stream for mobile money agents: cash-in transactions, which have become the preferred method of payment for customers.
This is due to some customers' desperate attempts to avoid the tax, as cash-ins – also known as deposits – have become the norm since the 1.5 percent tax went into effect about three weeks ago.
Customers withdraw cash and give it to an agent to be sent to the destination mobile money account rather than sending money through their own mobile money accounts, avoiding the E-levy in both transactions and thus avoiding tax payment.
However, because telecommunication companies still charge clients 0.75 percent of the transaction value and then give commission to the agents, this type of'smart' move from customers does not result in a loss for the agents.
The majority of the agents told the B&FT that while there were panic withdrawals a few days after the E-Levy went into effect, activity picked up immediately when customers realized mobile money agents were exempt from the E-levy charges.
"The onset was a little slow, particularly the day before the E-levy went into effect – they did panic-withdrawals." People were afraid to make deposits the next day, but when we explained that there is no E-levy charge on deposits and withdrawals, they returned. So far, so good," Daniel Osei, a MoMo agent at Kasoa, told the B&FT.
"Now the cash-in has increased; all those who used to load their wallets do not do that anymore; they give us the money and we do the transfer on their behalf, and this does not attract E-levy," said another mobile money agent at Makola Market who asked not to be identified. In some ways, the E-levy has aided us.
"That's how I see it, because the more cash-in transactions you do, the more commission you get from your service provider at the end of the month." So the E-levy has been extremely beneficial to merchants."
"For now, when it comes to deposits, yes, its patronage has increased because people are refusing to transfer money from their phones to different numbers," Esther Amoako, a mobile money agent at Djanman near Weija, told the B&FT in an interview.
"They rather come and withdraw and deposit it to the number to which they want to send money; so there's been an increase in that area as opposed to before when they deposited the money on their numbers and did the transfers themselves."
"Now, if they have money on their phones, they withdraw it and ask me to send it for them." This will be reflected in the Telcos' commission at the end of the month. In other words, more cash for us."
Legal or illegal
The question of whether it is legal or illegal for mobile money agents to conduct such transactions has become contentious after a member of the E-levy Technical Committee, Patrick Frimpong Danso, stated on a local television network, UTV, that it is.
However, the agents argue that they are only making deposits, which their system allows them to do and which are permitted by the telecommunications companies (Telcos).
"We do cash-in cash-out, not transfers." We accept deposits and withdrawals but not transfers. Even transfers from a merchant SIM are not permitted. Transfer is only available on the subscriber's SIM. "The subscriber does not have deposits on their numbers; the deposits are held by agents," Mrs. Amoako explained.
"Prior to the E-levy, network providers told us not to transfer money to other people on behalf of customers, but it didn't work because most customers claim they can't do the transaction themselves," Belinda explained.
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