OPay’s lack of transparency in transfer fees is why consumers need protection

On Monday, 4 November, any user of OPay who made a mobile banking transfer was charged fees far higher than the N10 he or she was used. There was no prior notification nor explanation until the very shocked users began to complain. Apparently, the Chinese firm which has become very popular by offering discounts on its “super app”, had taken a unilateral decision to introduce charges on money transfers.

One user on Twitter, Foye Gbolahan, recalled trying to transfer the sum of N19,000 and ended up paying an additional N270 to complete the transfer. For context, Nigerian banks charge a flat fee of N52 for transfers below N500,000.

OPay’s response after he complained about the charge was;

“In order to continue to deliver positive results, we will be increasing the bank transfer rate from N10 per transaction to 2 percent per transaction effective today. The minimum fee is N15. we apologise for the inconvenience.”

Another user, Vicky Ika said she transferred N20,900 on the platform only to be charged N418 as transaction fees.

Although OPay has apologised for kicking off the 1 percent regime without informing its users which raises serious questions about transparency, the increase, however, is sure to have millions of users who now use the platform to have a rethink. For instance, an OPay user who wants to transfer N100,000 will be charged N1,000 for the first transaction and if he or she makes repeated transfers, a fee of N45 is removed from the transactions.

OPay is not the only fintech company operating in Nigeria that increased transfer fees recently. Carbon, former Paylater, also introduced a 1 percent transaction fee for debit card transfers to Carbon Wallets. It, however, continues to charge a flat N10 fee for transfers from wallets.

Unlike OPay, Carbon, however, informed its users one week before the commencement of the new charges and followed it up with a detailed explanation of why it was making the change. The one-week notification came with a countdown which helped to get users prepared to make the leap.

OPay’s case, unfortunately, has not been the same and it is probably not the first time users are not being notified before a fee is introduced.

“@opay_NG your services started out being awesome no doubt about that, all of a sudden you changed policies without informing any of your users,” Eyinade Temilade, an OPay users posted on Monday. “I will break it down, it used to be 5% bonus on airtime, you stopped it without any notification to your users. Next is transfer charges; it used to be N10, you increased it to N40 without any notification to your user, today I made a transfer of 17k to someone and you deducted N340, a whooping N340, what explanation am I getting for this?”

The Central Bank of Nigeria has in the past issued guidelines for fintech operators in the country. Some of the guidelines include the CBN Guideline on Operations of Electronic Payment Channels; CBN Guidelines on International Money Transfer Services; the CBN Framework on the Use of Unstructured Supplementary Service Data (USSD) and many others.

While the guidelines made provisions for how operators conduct themselves in the financial services sector, the goal has been to create a level playing field and not for consumer protection.

The job of consumer protection in Nigeria falls on the lap of the Federal Competition and Consumer Protection Commission (FCCPC). But without a legal framework, it is difficult for the commission to effectively protect the rights of consumers.

“@OPay_NG it will be helpful to the customers if you act far more transparently disclosing all fees and charges with sufficient clarity and understanding,” Babatunde Irukera, head of FCCPC was all could manage in a tweet.