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Time to act tough on mobile phone banks

And, true to a tagged customer, I have never subscribed to another mobile phone service except my favourite Tigo. Whoever bewitched me must have had more than a German portion for a very potent spell. It is almost next to impossible to get the Tigo mobile cash service without hitches at any time of the day or week. Weekends tend to have the worst experience.

And, most frustrating is an attempt to get to their customer service desk. It appears they have a single line or very few workers to handle their millions of customers. Even when connected, the phone simply keeps on ringing while you as customer are charged for waiting as if it is any of your fault! What all that adds up to is that Tigo have only a mouth to speak to their customers but no ears to listen to them!

But who should be blamed? In one of my worst disappointing moments I contacted the Tanzania Communications Regulatory Authority (TCRA), who told me they had no business with the mobile cash services as the business was carried out under licences issued by the Bank of Tanzania (BoT), the only body in our country authorised to issue licences for financial services.

It was an eye opener for me. Outwardly, what we customers see is a mobile phone company but actually behind it is a bank! That bank is supposed to be very convenient, with a customer’s money available at any time he needs it. In reality however, it is not the case. A customer is solely dependent on the proper functioning of some logarithms fed into computers.

Unfortunately, those logarithms simply go mad rather too often. When the computers fail, a customer is disadvantaged by almost 100 percent. Unlike in traditional banking, mobile phone banking is extremely impersonal. Because there is no banking hall, the guys behind the cash transactions remain unknown to customers with therefore, a highly reduced degree of accountability.

Only yesterday (Friday, March 23,) the Tigo-Pesa service was unavailable for at least not less two hours. I tried accessing my account at around 10.00 am and gave up at around 12:30pm when all the response I could get read something like “supplementary error.” One can only imagine the level of frustration and inability to satisfy a need in reasonable time simply because he cannot access his money!

Ordinarily, Tigo would flood their customers with a lot of messages, including a flurry of reminders when the call credit runs low but I have never received any courtesy message that they are having trouble with their Tigo-Pesa service. The Bot is another headache institution where customer queries are never responded to in good time.

So it is a kind of cultural thing that runs deep in our financial services sector much as this nation likes to tout efficiency in its business culture, especially in literature to attract more investments. The inefficiency question aside, financial service charges by mobile phone banks are also terribly high. It costs Sh 1,800/- to withdraw Sh 100,000/- from a Tigo-Pesa account while it costs only Sh 600/- to do so from a CRDB Bank Automatic Teller Machine (ATM).

Why the huge difference? I doubt Tigo-Pesa can justify higher operating costs than CRDB Bank to merit their service to be three times more expensive. But it all happens because this country has generally silent customers and officials who do not care when customers get mugged. Otherwise, I cannot easily believe that the extremely high financial service charges by mobile phones banks are unknown to BoT.

If anything, charges by mobile phone banks should have been the lowest. The banks account on any one day for more cash transactions than the traditional banks put together. So why milk their customers? One Mafia boss once said: “money is made in the dark.” How true? Because customers never get to see the faces of those behind mobile phone banking, it becomes very easy to fleece customers!

I think it is high time mobile phone banking was properly regulated. To start with, TCRA cannot claim to have no hand in the business because it is done through their medium of legal jurisdiction to regulate – electronic communication. In any case, what customers see first is the mobile phone company; the morphing into banking is to say the least, none of their business.

Secondly, I think BoT should also establish a special unit, if one doesn’t exist already, to monitor rigidly the behaviour and conduct of mobile phone banks. If a traditional bank failed to open its floors to customers for five hours in day, would BoT say it’s quite okay and allowed under their business licence? I doubt. So why are mobile phone banks allowed to be on perpetual holiday?

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Author: Mboneko Munyaga

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