If the ongoing battle between Africa’s largest telco, MTN, and Nigerian commercial banks prolongs, fintech companies may well turn out to be the beneficiaries.
MTN has informed its customers that they could buy their airtime and internet data from platforms such as Barter by Flutterwave, Kuda Bank, OPay, Jumia Pay, BillsnPay and Carbon.
“It will interest you to note that for the benefit of our customers who have been greatly inconvenienced by the service suspension, we now have alternative channels of accessing MTN services electronically,” the telco said in a statement on Saturday.
The move comes as the feud between Nigerian banks and MTN which shut out millions of customers from buying the telco’s airtime and data bundles through their bank channels entered day two.
Nigerian banks cut off the largest telecom operator in Africa after the latter decided to cut back on the commissions it pays out to banks and fintechs on the sales of airtime and data.
In a letter addressed to partners, MTN said with effect from April 1, 2021, it was reviewing the channel structure and discounts. The changes, it said, were as a result of industry realities and would ensure commensurate recognition and reward for each partner’s performance.
Effectively, the review meant that from April 1 the commission paid to partners would reduce to 2.5 percent from 3.5 percent.
On Friday, the telco sent a message to its over 77 million subscribers informing them of the unavailability of bank recharge channels and asked them to use physical cards.
Many customers who have got used to recharging through the banks and USSD channels said it was too much to ask.
“Where does MTN want me to find physical recharge cards?” asked Ebenezer Ejeolu, a subscriber.
Another subscriber, Olasunkanmi, tweeted his frustration thus: “Having to go out and get a physical card to recharge on MTN is too much work.”
Although customers could also recharge using the MTN mobile app, this is still not a sure-fire given that only a little above 10 million subscribers have installed the app on their android phones. This figure includes customers across the markets in Africa that MTN operates in.
Hence, to satisfy its over 77 million customers in Nigeria, the telco has sought partnership with platforms that many of its subscribers actively utilise.
The advantage that banks bring to the telco is enabling customers to not only buy through mobile apps but also via USSD. This means subscribers don’t necessarily require the internet to buy airtime; with a USSD service they can have their phones recharged or get access to Internet data.
With the ongoing feud with the banks, MTN is looking at fintech start-ups to fill the gap. While this will benefit the start-ups, there is a question of capacity. Do all the fintech platforms also offer USSD to enable MTN subscribers in locations without Internet access to still stay connected via voice subscriptions?
Although Barter by Flutterwave is popular among Nigerian millennials, its download records on Play Store is just between 100,000 to 500,000. But what MTN doesn’t get in Barter it can hope to make up with OPay which boasts of between 5 million to 10 million installs. Kuda Bank and Carbon also come into the partnership with between 1 million to 5 million installs each.
But the feud with banks seems a temporary one as the Minister of Communications and Digital Economy, Isa Ali Pantami, said he is talking to both parties and hopes to reach a resolution as soon as possible.
“On the fallout between @MTNNG and some banks on USSD services today, I engaged with both regulators, the Governor of CBN and EVC of NCC. We have reached an advanced stage of resolving the issues for the services to be restored to our citizens,” Pantami tweeted on Friday evening.
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