Rwanda: central bank removes push and pull charges
No fees or charges will now be incurred when transferring funds from their bank account to their mobile money wallet and vice versa (push and pull fees).
The Central Bank removed costs in its latest directive in an attempt to promote efficiency and protect users.
The directive, which comes into force immediately, prohibits fees and charges on transfers between his mobile money wallet and his bank account.
The so-called “push and pull” transaction has sparked debate in recent weeks, as a majority of users lamented that it risked reversing gains made in previous months in the use of cashless payments.
In May this year, the central bank told the New Times that it had commissioned a study on the pricing of digital financial services.
“Fees and commissions on transferring funds between electronic money and deposit accounts belonging to the same person are prohibited,” reads part of the directive signed by Central Bank Governor John Rwangombwa.
The Central Bank also removed interest on trust accounts held by the telecommunications company, which was also cited as a factor in increasing fees.
In pull transactions (transfer from account to mobile wallet), banks paid interest when funds were transferred from the customer’s bank accounts to a trust account held by the telephone company.
The banks paid interest on the funds held in the trust account at a rate of about 6 percent. Interest on the trust account has already been cited by local banks as a problem and a determining factor in the cost of the transaction.
“Trust accounts and associated individual electronic money accounts are only used for the purpose of facilitating payment services. As such, interest on trust accounts and interest on individual e-money accounts are prohibited, unless the latter is explicitly used as a savings account. The directive reads.
In the local market, the costs of pulling, for example, 40,000 Rwf from one’s bank account to a mobile wallet have been estimated at between 200 Rwf and 1,000 Rwf.
In previous interviews with The New Times, banks had defended transfer costs citing the recovery of investments made, costs incurred and convenience fees.
The banks had cited some of the costs incurred in the process to include the mobile banking system, integration costs, software and its maintenance as well as back office reconciliation resources.
Other costs include SMS notification and USSD session fees.
Teclos, on the other hand, had justified the costs of push transactions (mobile wallet to bank account) by citing that they enter into costs such as agent fees, back-office reconciliation resources, customer support and other technology resources.