KENYA:Mobile money agents in await huge commissions after Christmas boom

JAN 06,2014.

COASTWEEK.

If there are businesspersons in Kenya who wish Christmas and New Year holidays would come more than once a year, it is mobile money agents.

The agents are happy as they are awaiting huge commissions from the telecom companies that have contracted them.

Several mobile money agents acknowledged that the holiday season pushed their volumes to new heights as Kenyans sent and received money from their loved ones.

“I wish Christmas would be held after every six months. The amount of money I transacted in the ten days is sometimes my turnover in two or three months,” said Fredrick Mula, a mobile money agent in Komarock on the east of the capital.

Mula, who opened his business on Christmas and New Year days to cash in on the boom, noted that most people were depositing cash in their accounts so that they can send it to their kin.

“The minimum many people deposited was 12 U.S. dollars unlike during the other periods when sometimes some send even 2.5 dollars, “ he said.

A good number of people sent over 580 dollars, according to Mula, but the bulk was sending an average of 24 dollars.

“I would open my shop by 8 am and close it over 12 hours later because of high number of people seeking my services,” he said.

This is despite increased competition from several other traders in the area, some who set up shop last December to cash in on Christmas boom. During the period, Mula recounted he transacted business worth over 2,325 dollars.

“Sometimes the float would go down and I had to wait for people to withdraw so that I have cash in my account to cater for deposits,” he said.

However, the businessman had planned for the eventuality as he had two mobile money agency lines.

“A friend of mine wound up his business in the city center sometime in November and sold me the line. When I bought it for about 700 dollars, I knew I needed it because I figured out it would help me ensure I do not run out of float,” said the 38-year- old man, who usually receives a commission of about 290 dollars every month from mobile money but now expects more.

The extra account made customers know that he can handle huge transactions. One of the main push away factors in the business is customers to know one does not usually have enough float.

“People will not come to you if they know you usually run out of float. But I made a name for myself, I guess that is why the number of customers flocking to my facility was high,” he said.

Mula, who runs mobile money shop alongside a chemist, noted the latter benefitted immensely from the former.

“People would come to withdraw or send cash and buy drugs or vice versa. I appreciated the power of mobile money and I do not regret joining the business,” said Mula, who lost his job at a pharmaceutical company three years ago.

Central Bank of Kenya latest figures indicate that mobile money use in Kenya usually surges during the festive season.

As in October, Kenyans had transacted business worth over 18.2 billion dollars on mobile money service.

Researchers have found out that use of mobile money increases during festive season because Kenyans use the service to create and enhance relationships by sending money and airtime gifts.

Calvin Wachira, a mobile money shop operator in the city center, is grateful of Christmas but noted the boom season is not yet over.

“We expect the volume of cash being sent and withdrawn to increase this week and the next one due to the opening of schools. Many people will be sending and receiving money for school fees,” he said.

Wachira, who was reluctant to disclose how much he transacted during the December holiday, observed that the amount tripled.

His stall is located at a shopping center on the busy Moi Avenue in Nairobi’s central business district. The number of people entering the complex and seeking his services is high.

Deposits of 23 dollars and below earn an agent a commission of about 0.13 dollars while withdrawals of the same amount earns one at least 0.17 dollars.

The higher the amount of money a customer transacts, the higher the commission the agent earns. For instance, a deposit or withdrawal of 465 dollars will earn an agent a commission of up to 174 dollars per transaction.

However, as the agents cashed in on the Christmas boom, fraudsters were also on the prowl.

“There are some people who wanted to avoid paying transaction fees by seeking to deposit or send cash directly through my account. We had to watch out for that,” said Mula.

Others, according to agents, would deposit cash to a number and pretend it is a wrong one yet they had spoken with the person on the other side to withdraw the cash.