Fintech apps see a boost as bank fees on online transactions increase

More individuals and businesses in Nigeria are seen adopting fintech banking apps as a means of escaping excess fees and delayed services from commercial banks.

According to a BusinessDay survey, six out of 10 point-of-sale (PoS) operators and customers are turning to wallets such as Opay, Moniepoint, Paga and Kuda, among others, to conduct transactions.

Nelson Uwa, a PoS operator, says the fintech services are much more seamless than the bank.

“I use Moniepoint, Opay and First bank Pos in my business, it’s clear the difference is very clear in terms of network, services rendered etc.”

Regarding service, he said “As a result of the network problem associated with banks, I prefer to use the money point and my Opay machine for my customers because it hardly encounters network errors compared to my first bank PoS machine.

With the current state of the economy, Uwa said, “if these fintech firms can provide physical cash to operators, they can beat the system’s banks.”

Also Read: How Domestic Card Scheme Will Benefit 38 Million Unbanked Nigerians

Similarly, Chidozie Michael said he transacts using the Opay app and has never incurred any errors and the charges are minimal.

“When I do a transaction with either my Opay card or app, I don’t incur any charges compared to when I was a bank customer at one of the tier-1 banks,” he said.

As fees levied on bank customers for each transaction carried out using their various online channels continue to bite, it turns out that many are turning to fintech apps to avoid incurring such fees.

This deduction, which is quite different from the usual bank transfer charges, varies from N700, N300 and N250 as complained by banking customers on social media and has been adopted by various tier-1 banks.

Owoyele Yusuf, a Twitter user said “Can you explain this deduction to me because I didn’t understand this, after your ridiculous way of deducting from the account. Why now? What is the Electronic Funds Transfer fee? CBN announced a cashless policy and banks cut us in the neck.”

Nelson Onyenwe, a wine shop owner at Ikotun said. “If a businessman likes five different transactions every day, it means that they are going to lose this amount in different places, which means we face losses in handling e-banking transactions.”

The banks need to review these transfer and POS fees because the ridiculous total cost is rubbish, they should be zero cost below certain amounts and a fixed percentage for others, El Jefe said in his tweet.

Adedeji Olowe, a fintech expert explained that overcharging the masses does not make the push to achieve a cashless economy seamless as it is more likely to affect the poor Nigerians.

“If the CBN wants to go cashless, it should make transfers free. The poor are most affected by the cashless and the elites (CBN and bank governors) think of money and value differently. Time is expensive for the executives, so paying N‎50 for the transfer is nothing to them. But to the poor, every kobo counts,” he said

A source in one of the Tier-one banks who asked to remain anonymous said: “The directives come from the CBN and I would not know if other banks have payment orders other than what we are charging.

“We’re going cashless and we’re in this business to make money. We’re focusing on e-channels and there are so many things we have to adopt and adapt to. We have to connect our hearts and achieve that,” she said.

According to her, everyone is expected to embrace the cashless policy and deal with the obstacles around.

“The supplement makes no sense to me. They said they use the money for taxes and other things, but to me I don’t see what they are doing. It goes into a government account. Everything will be fixed. The regulatory body brings out these guidelines and they know who and what they are fighting (corruption). Everyone wants to join despite the hurdles,” said another bank source.

Meanwhile, the CBN said the beneficiary bank is required to deduct the fee from the amount payable where the beneficiary is a walk-in customer who does not have an account with the bank.