E-levy testing resilience of MoMo industry

05-08-2022

E-levy testing resilience of MoMo industry

Chief Executive Officer of Mobile Money Limited, Eli Hini, has said that the introduction of the Electronic Transfer Levy (E-levy) is impacting the mobile money industry negatively, as evidenced by change in consumer behaviour.

Since the operationalisation of the levy in May, 2022, there have been public outcry against the charges with some customers reducing usage of the service, while others have abandoned it entirely.

While bemoaning the impact of the levy on the growth of the mobile money industry, Mr. Hini, expressed optimism about the future of the service, hinging it on the convenience it offers.

“The resilience of the mobile money industry is being tested with the introduction of E-levy. We continue to see a change in customer behavior, and we keep monitoring the space to see the outcome overall. It is early days since the introduction of the levy, but we are confident of sustaining growth soon.

That notwithstanding, we continue to urge the use of MoMo for all the benefits it presents to the customer,” Mr. Hini said in his address at launch on the MoMo Month in Accra, Wednesday.

Meanwhile, as means to reduce the impact of the levy on consumers, Mobile Money Limited capped mobile money service fee at 0.75 percent for transactions on the platform with a GH¢7.50p for transfers from 1,000 cedis and above, the CEO stressed.

In May 2022, government passed the Electronic Transaction Levy in a bid to rope in revenue to boost the country’s economy and address the fiscal challenges the economy is facing.

However, data published by the central bank show strong disaffection for the tax from the people as the mobile money platform registered a GH¢16.3billion loss in value in May – the very month the tax was introduced – from the GH¢87.7billion recorded in April.

Then, in June, the value of transactions hit GH¢77.4billion, indicating a GH¢10.3billion drop from what was recorded in April, albeit higher than the GH¢71.4billion registered in May.

In terms of the number of transactions, mobile money experienced another setback as activity on the platform declined by 25 million since April – from 403 million to 378 million in June.

Furthermore, the balance on float, thus, the amount on people’s wallet on the payment platform, has also declined to GH¢9.3billion, shaving off GH¢300million since April.

Transactions that fall under the E-levy include transfers done on the same mobile money network to another person, transfers from one mobile money network to a recipient on another network, and transfers from a person’s bank account to another person’s mobile money account.

Also, transfers from a person’s mobile money account to another person’s bank account, bank transfers on a digital platform or application which originate from a bank account belonging to an individual to another person, and interbank daily cumulative transfer above GH¢20,000 and transfers to escrow accounts on Instant Pay.

In the face of all these setbacks, however, Governor of the Bank of Ghana, Dr. Ernest Addison, has said it is not yet time to scrap the electronic payment levy (E-levy).

 

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GNBCC | News