The Central Bank has intervened in a bid to address concerns over the cost of transferring funds from one’s bank account to mobile money wallets. 

The goal of the Central Bank is to find an agreeable price point that is not prohibitive for users.

Commenting on the public debate, Central Bank Governor John Rwangombwa said that the ideal price points should be optimal to support the recouping of investments by service providers and affordable to encourage uptake.

"It is not easy to strike that balance. We understand where both parties are coming from,” he said, adding that discussions are ongoing with both the banks and telcos. 

The Central Bank has also commissioned a study on the pricing of digital financial services. And, according to Rwangombwa, the study, that is set to be completed before the end of the year, will help determine the way forward. 

While the Central Bank does not regulate prices for the transactions, the governor urged service providors to ensure costs are not prohibitive. 

"We may not have a solution as the Central Bank or direct service providers on how to price, however, it is in everyone’s interest to grow the cashless business. It’s  an objective by the government but also of benefit to financial sector players,” he said.

Rwangombwa added: "In that context, we are looking at what can service providers fore-go for now to drive the systems and later benefit from economies of scale when there are more users?  These are the lines around which we are engaging the players at the moment.”

According to Banks, the main cost drivers are investment related to setting up mobile banking systems and maintainance.  The New Times has established that some used up to $250,000 to set up the system and incur over $25,000 annually for maintenance.

During the pull transactions, banks also pay interest of up to 6 per cent when funds are moved from the client’s bank accounts to a Trust account held by the telco sitting in the same bank. Some banks said, if this rate was revised downward, they would be in position to also review the costs.

The concerns come at a time when digital financial services have been on the rise

Mobile payment transactions increased by 92 per cent from 116 million transactions in March 2020 with a value of Rwf 736 billion to Rwf 3,950 billion as at March 2021.

As a result, the trust account in local banks saw balances grow from Rwf46.3 billion in March 2020 to Rwf66.6 billion as of March 2021. Trust accounts are accounts held by telcos in various banks where funds move during a pull transaction. Banks pay interest on funds held in the trust account.