Nigeria Banks: MTN cuts vending commission by 37.5

Nigerian banks have criticized MTN telecom for cutting vending commission to 2.5 per cent. This represents 37.5% reduction in income acquired previously by the lenders when the Telecommunication giant’s VTU buy airtime and data.

The slash in vending fee, have made customers unable to buy through their banks’ Unstructured Supplementary Service Data (USSD) and other means of payment.

“Dear customer, this service is temporary unavailable. Kindly contact your Telecom service provider.”

A message one of the banks recieved after a failed attempt to use USSD. There is a rumor that MTN Nigeria acted based on directives from its head quarters South African.

When MTN headquarters was contacted through phone calls and text message, the Telecommunication company didn’t respond.

But an industry source said that the MTN provider recently held a meeting and announced a 37.5 per cent  reduction in its vending commission. This meeting was held without the notice or approval of the Nigerian Communication Commission (NCC) or the Central Bank of Nigeria (CBN).

An action token without consultation or negotiation with any financial institution. MTN informed all aggregators that there will be reductions of the agreed commission. And  that it will be remitting for airtime sales on banking platforms.

Since no other service provider supported this idea, why did MTN take such decisions and currently making customers life harder? Didn’t CBN resolve the dispute between the Telecommunication companies and the banks?

Findings showed that Airtel and MTN were paying the least commissions at four per cent. GLO, pays six per cent and 9mobile, 7.5 per cent – agreements based on volume. The source said the MTN Nigeria move puts the Banks in a precarious and economic loss position, as the cost of marketing and airtime vending infrastructure maintenance by the banks outweigh the new commission rate imposed by MTN. And not only that, these expenses will be imposed on the innocent customers.

The latest news shows that the internal sources is not in  support of the company’s arbitrary reduction of commission to airtime vendors.

“This is part of a market dominance plan. Their aim is to control the Nigerian telecoms and financial sectors. By eliminating aggregators and squeezing margins from all third party contractors and business partners.”

What MTN didn’t considered is that,  they are preventing Nigerian Banks from providing the necessary services to customers through it’s Telecommunication platform.

“we are not saying that we have the best policies or practices in Nigeria,  but, MTN’s use of lobbyist and impose of aggressive margin pressure on business partners was the pattern used in other part of Africas like Ghana, Ivory Coast, Uganda and Benin to gain dominance in Telecommunications and Mobile Money”.- Commercial bank.