customers are charged extra fees for e-payments

Customers paying utility bills should not be charged extra fees, telecommunications giant, MTN Uganda has told parliament.

According to MTN, utility companies are charging customers a transaction fee, which is irregular.

While meeting MPs on the finance committee, Wim Vanhelleputte, MTN chief executive officer, said that the bill payment should be free of charge for the customer, and the receiver, who, in this case is the utility supplier, should meet the costs.

He said, for instance, the payment through mobile money cut the cost of operation that would have been incurred by the utility companies like National Water and Sewerage Corporation (NWSC), cable TV networks/providers, power supplier, Umeme among others.

Since the introduction of the electronic payment system by the utility companies, customers have been bearing the cost of transaction fees.

For instance, for a payment of sh 10,000 for electricity on Ezee Money payment system, a customer is charged sh 250 as transaction fees, sh 402 as forex adjustment fees, sh 14.23 as inflation adjustment and sh 79.56 as fuel adjustment fees on top of sh 1,487.29 as VAT.

Vanhelleputte cites Kenya, where the transaction fee is paid by the merchant. According to Vanhelleputte, the fee from payment ranges from 0 to 1% for the suppliers.

“The one who receives payment from the bill payment whether it is water or school fees or just going into the bar or the boda boda, the principle is that the receiver will take charge of 0.5%, 1% just like Visa.

If you pay with Visa card, in theory it should be free of charge for you as the user and the 1% or 2% that Visa will charge is paid by the hotel or the airline or whoever it is receiving your payment.

Unfortunately, for historical reasons in Uganda, the industry has developed in such away that for certain bill payments it is the customer who’s paying the charge, which shouldn’t be like that,” Vanhelleputte said.

Henry Musasizi, the chairperson parliamentary committee on finance said the citizens have been cheated by utility companies, and it is time to have it changed.

Musasizi says he wasn’t aware that transaction costs are supposed to be met by the utility suppliers. He says they will as a committee table the concern alongside their report to parliament.

“I personally did not know that when I pay my utility bills using mobile money instead of the companies meeting the charges, I’m the one as the customer who’s being charged for this. I pay my DSTV or Umeme and Umeme puts a fee on me for paying using mobile money.”

“The question is who am I paying? Am paying the company, the service provider and the service provider is gaining from my payment. Why should be the one to incur the charges?” asks Musasizi.