If you are looking to learn how you can venture into a mobile money business and get rich as a super agent, you are in the right place. In this guide, I will take you through steps on how to start a lucrative mobile money business in Uganda. The mobile money business is so profitable that you can earn so much to make you resign from your current professional job. Before we get into the steps to get started, let’s first learn a little about mobile money.
What is mobile money?
Mobile Money is an electronic mobile service that allows users to send, receive or store money on their mobile phones. It is the fastest growing convenient alternative to traditional bank accounts and can be accessed on any mobile device including smartphones and feature phones commonly known as ‘Kabiriti’ in Uganda.
Mobile money is basically the transfer of money on mobile. The service enables people to send and receive money using their mobile phones.
Mobile money services have been around since 2009 when they were first introduced in Uganda. MTN Uganda were the first innovators of Mobile Money services in Uganda followed by Airtel (formerly Zain).
When it started, Ugandans did not understand the service well, unlike in Tanzania and Kenya where it was an instant hit.People later embraced the system and by 2015 and already had some 5,000,000 subscribers who were using the service either directly or indirectly.
Mobile money has become the fastest, secure and most convenient money transfer service in the country. Ugandans can now send money to any part of the country from anywhere in just minutes. The mobile money system has actually achieved what banks had failed to do.
Currently there are only 7 mobile money schemes in Uganda and they are all regulated by Bank of Uganda.
Today mobile money has integrated with other financial industries including e-commerce, something that has made money transaction life even much easier for Ugandans
Who invented mobile money?
It is alleged that Mobile Money was invented by a Makerere University Software Engineering student who was undertaking his final year project. It is further alleged that, through one of the top Makarere University administrators by then, the student pitched his idea to Airtel Uganda, but airtel refused to take on the idea. The student later pitched his idea to MTN Uganda who bought it at UGX 500M. The then MTN CEO implemented the idea which turned out to be a multi-million dollar industry it is today.
But one wonders why this student opted not to invest in his own idea? Well, at least he was paid for it. There are so many other theories about who invented Mobile Money in Uganda, including one of a female Ugandan student who was studying in India, but none of them has ever been backed by valid evidence.
As far as mobile money is concerned, MTN Uganda holds rights of ownership of the service and are legally and technically the innovators/inventors of the now Uganda’s most popular mobile money transactions service. Whether these mobile money invention allegations are true or not, is a story for another day. One thing I’m sure of is a simple idea can transform a nation and its millions of citizens. If you ever have a unique innovation, ensure you patent it to keep your legacy.
Mobile Money Usage [Statistics] In Uganda
The key players in the mobile money business are MTN Uganda and Airtel Uganda who together account for about 99% of the mobile money agent market, with MTN Uganda being the market leader with 57% followed by Airtel Uganda with 42%. Other telecoms account for only 1%.
MTN Uganda still leads across all geographical areas of Uganda with its market more pronounced in rural areas where it boosts 59% of agents, while 40% for Airtel.
A survey conducted by Helix Institute of Digital Finance reveals how mobile money transfer businesses based in rural areas of Uganda are becoming more profitable as compared to those based in urban areas.
In urban areas MTN Uganda accounts for 58% while 41% for Airtel. In both rural and urban areas, other mobile money networks account for only 1% of the total transactions made.
A 2018 report revealed that mobile money transfer services in Uganda recorded an increase in mobile money transactions from UGX 54 trillion in 2017 to UGX 63.1 trillion in 2018.
The number of registered mobile money users (or subscribers) also increased from 21.6M as of 2016 to 23.4M as of 2017
List of 7 telecom companies offering mobile money services in Uganda
- MTN Uganda
- Airtel Uganda
- Africell Uganda
- Uganda Telecom
- Smart Telecom
Basic terms used in Mobile money
Before we proceed with this guide, it is important that you understand the basic terminologies used in the mobile money business in Uganda
Agent. An agent is a person who is contracted to conduct mobile money transactions for users. Sometimes agents do register new customers. Agents are paid on commission for carrying out these services.
Aggregator. This is a person or a business entity that is responsible for recruiting new mobile money agents. Sometimes an aggregator is also known as a super-agent.
Anti-money laundering (AML). This is a set of rules, issued by Bank of Uganda, that attempt to prevent and detect the use of financial services for money laundering or to finance terrorism. The global standard-setter for AML rules is in the Financial Action Task Force (FATF).
Mobile money. This s service in which the mobile phone is used to access financial services.
Bearer. This is a mobile channel through which instructions are communicated between a customer’s handset and a mobile money application platform. Mobile network operators provide the ‘bearer channel’ in any deployment, sometimes for a fee to compensate them for the cost of data traffic. The most commonly used bearer channels are USSD, SMS and GPRS.
Cash in. This is process by which a customer credits his account with cash. This is usually done via an agent who takes the cash and in return credits the customer’s mobile money account.
Cash out. This is process by which a customer deducts cash from his mobile money account. This is usually done via an agent who gives the customer cash in exchange for a transfer from the customer’s mobile money account.
E-money. This the short form for “electronic money,” is stored value held in the accounts of users, agents, and the provider of the mobile money service. Typically, the total value of e-money is mirrored in (a) bank account(s), such that even if the provider of the mobile money service were to fail, users could recover 100% of the value stored in their accounts. That said, bank deposits can earn interest, while e-money cannot.
Float. This is balance of e-money, or physical cash, or money in a bank account that an agent can immediately access to meet customer demands to purchase (cash in) or sell (cash out) electronic money.
Liquidity: This is ability of an agent to meet customers’ demands to purchase (cash-in) or sell (cash-out) e-money.The key metric used to measure the liquidity of an agent is the sum of their e-money and cash balances (also known as their float balance).
Mobile Money Transfer: This is the movement of value that is made from a mobile money account to another through the use of a mobile phone.
Platform: This is hardware and software that enables the provision of a mobile money service.
Know Your Customer (KYC). These are the rules related to Anti-money Laundering (AML) which require providers to carry out procedures to identify a customer.
G2P. Government to person
Informal financial services. These are financial services offered by unregulated entities e.g loan-shark lending, savings groups, etc.
Interoperability. This is the ability of users of different mobile money services to transact directly with each other.
MNO. Mobile Network Operator
Masteragent. This is a person or business that purchases e-money from an MNO wholesale and then resells it to agents, who in turn sell it to users. Unlike a superagent, masteragents are responsible for managing the cash and electronic-value liquidity requirements of a particular group of agents.
Superagent. This is a business, sometimes a bank, which purchases electronic money from an MNO wholesale and then resells it to agents, who in turn sell it to users.
Regulator. This is the regulator who has supervisory authority over financial institutions within a particular country. In Uganda, the regulator is Bank of Uganda.
Mobile banking. The access of a mobile bank account via a mobile phone and sometimes the user initiate transactions.
Mobile money transfer. This is the movement of value that is made from a mobile wallet, accrues to a mobile wallet, and/or is initiated using a mobile phone.
How The Mobile Money System Works In Uganda
A user has to register for a mobile money account from any of the available mobile money schemes e.g MTN, Airtel, Africell etc. The mobile money account is created on the user’s registered phone number.
Once a user is fully registered and their account approved, they load cash-in on their mobile money account through a mobile money agent nearest to them. The user pays cash to the agent and in exchange, the agent gives them e-money.
The user then receives a confirmation message on their phone confirming a cash deposit transaction. Alternatively the money can be loaded on the user’s phone by anyone who is registered on mobile money and has cash (e-money) on their mobile money account.
When one has money on their mobile money account, they can easily send it to another person simply by following a few USSD command procedures provided by their mobile money service provider or the MNO. The user is prompted to enter their secret PIN, also known as the Mobile Money PIN, to complete the transaction.
Withdrawing money on mobile money? A user can withdraw cash from any mobile money agent outlet near them.
Roles of mobile money agents
- Register Mobile Money Customers
- Deposit cash into registered customer account
- Process cash withdrawals for registered and non-registered customers
- Mobile money education to customers
- Airtime sales
- Simcard registration
- Comply with MNO’s business practices
How Mobile Money Is Used In Uganda
- Sending and receiving money in Uganda and abroad
- Storing money
- Used in depositing and withdrawing money from bank accounts
- Saving and borrowing money
- Paying for goods and services both online and offline
- Paying for utilities like electricity (UMEME/Yaka), water etc
- Withdraw money from ATM machines.
- Paying school fees
- Paying for NMO services e.g Airtime, data bundles etc
- Used in making donations
- Paying for transport e.g taxi services like Uber, Safe Boda and Taxify
Requirements To Start A Mobile Money Business In Uganda
- At least two transactions lines. MTN and Airtel are recommended because of their large market share. These two process 99% of all mobile money transactions while the rest process only 1%. However other networks like Uganda Telecom and Africell are just significant as well.
- Mobile phone. Duo sim feature recommended
- Retail space ie a room. If you can’t afford rental fees of a room, rent a veranda.
- Furniture ie chair and a display table with drawers where you can keep your tools of trade
- Transaction books
- Busy location
- Trusted employee/operator if you can’t run the business yourself.
How To Get Started
After fulfilling the above requirements, here are 3 approaches you can follow to get started
- Hire mobile money transactions lines or;
- Get a transaction lines through a master agent or aggregator or;
- Register for mobile money transaction lines directly from Mobile Network Operators (MNOs).
Hiring A Transaction Line
With this, you don’t need to go through the hectic procedure of getting a transaction line from an MNO. Here you simply hire an already registered line from someone or company. However when you hire someone’s line, you will be required to give up a certain percentage of your commission as rental fees. Most people charge between UGX 50-100k as rental fees.
Getting A Transaction Line Through A Master Agent Or Aggregator
An aggregators or a master agent is an individual or company that is authorized by the MNO to control their specific territory of operation. Master agents distribute e-money to ordinary agents are also responsible for licensing Mobile Money agents and issuing them with MM transaction lines. Earnings are based commissions and depending on the aggregator, you are required to give up a percentage on your commissions of up to 10%. Below is what one needs to be licensed as an agent through a master agent or aggregator:
- Original National ID or Passport
- Introduction letter from LC1
- A deposit of UGX 80,000/-
- Fill an application
- Have a starting float of at least UGX 2M.
Advantages Of Aggregated Mobile Money Lines
- Higher commissions. Hired lines attract a commission split.
- Direct payment of commission by MNO
- No delays in remittance of commissions
- Faster conflict resolutions
- Aggregated lines have a float management features ie you can get cash from super agents by exchanging excess e-float and vice-versa.
Register For Mobile Money Transaction Lines Directly From Mobile Network Operators (MNOs)
If you don’t want to hire a transaction line from someone, or get one through an aggregator, you can directly register as an agent from the Mobile Network Operator (MNO) e.g MTN or Airtel. Requirements to register as an agent directly with an MNO differ. Below I discuss the requirements need for one to directly register as agent with MTN, Airtel, Africell and Uganda Telecom.
Requirements to become an MTN Mobile Money Agent in Uganda
- You must have startup capital of UGX 1,500,000/- or UGX 1,000,000 if registering through a master agent or aggregator.
- Be registered as a limited company or sole proprietorship for period not less than one month.
- Have a photocopy of Certificate of Incorporation or sole proprietorship registration documentation and certificate of registration if the name on the trading license is a business name.
- Have physical or semi-permanent premises from where you can operate the business
- Photocopy of Certified Memorandum and Articles of Association
- One month Company Bank Statement/Bank statement
- Photocopy of valid ID(s) of company director(s)
- Letter of introduction from LC1
- Map and Photos of the Agent Premises
- Existing Business Turnover of at least UGX 5 Million per Month.
- Registered Board Resolution to start Mobile Money Agency Business
- Letter of Introduction of appointed handlers from the Directors
- Your official contacts and email address
- Proposed outlets to be inspected by the Telecom’s regional representative.
Requirements to become an Airtel Money Agent in Uganda
- Valid national ID or passport for foreigners
- Proof of residence
- Completed agent sub-agent application and registration forms
- Recommendation letter from LC1
- Passport photo of an applicant
- Certificate of Registration of Business Name
- Trading license [receipt]
- Filled Subscriber Registration Form
- UGX 2,000,000/- startup capital
Requirements to become an Africell Money agent in Uganda
To be an Africell Money agent you need the following requirements;
- National ID
- LC1 letter
- A registered business
- Two passport photos
- Startup capital of atleast UGX 50,000/-
Requirements to become a Uganda Telecom M-sente Agent
- Certificate of registration or Trading license.
- National ID
- One passport photo size.
- Fill and sign agent contract
Key Factors For A Successful Mobile Money Business In Uganda
Launching a successful mobile money business in Uganda can be quite challenging. Below are some of the critical factors to the success of a mobile money business in this already competitive industry.
1. Strategic Location
The location of business will determine the success of your business. Since the commission payouts on every transaction are too small, it is important that you choose a relatively busy area. The more the transactions you perform, the more money you make. I recommend setting up your business in locations such as busy trading centers, market areas, arcades, taxi parks, taxi stages, bodo boda stages, populated suburbs, corners of busy roads, commercial buildings etc
2. Trusted Operator
If you can’t run the business yourself, employ an operator who is trustworthy. Short of that, you are bound to fail.
Mobile Money being a business to do with money, you will need to hire an honest employee or operator that will maintain a high level of integrity. Do a thorough background on the person you plan to employ as an operator in your mobile money kiosk.
A friend told me how his business failed because of his operator who had secretly acquired own transaction lines, and would use them (own lines) for most transactions thus taking most of the commission. He only discovered this after this business had collapsed.
I have heard so many stories of people who have lost their entire business to dishonest operators. Just 3 months ago, I witnessed a mobile money business owner in Bugolobi, whose employee disappeared with UGX 12M.
3. Literate Operator
It is important that you employ someone who has ever gone to school. At least with a UCE certificate. The operator will need to have good mathematical skills because of the nature of work that involves money calculations. Customers come in all forms of manners with different money transfer requests. The operator needs to have good mental skills and be able to correctly determine the amount of transfer requested by the customer as quickly as possible. I personally witnessed this at a certain mobile money outlet, a customer came to deposit UGX 100,000/- but the operator mistakenly deposited UGX 1,000,000/-. She only realized after the customer has already disappeared.
4. Good Customer Care
This a very important factor that you must consider. Talk nicely to your customers, give them attention on arrival and politely answer all their questions however dumb the questions maybe. Good customer care will get you loyal customers who will frequently use your services and sometimes recommend your shop to their friends too.
5. Float Availability
Customers will come to your money shop to either deposit, send or withdraw money. Always ensure that you have enough float/cash to meet demands of each of your clients. For example if a customer came with a request to withdraw/send UGX 500,000/- and you don’t have it either in cash or e-float, the customer will move on to the competitor’s shop and might never come back to your shop again. Do not give such opportunities to your competitors. Always have enough e-money and cash. Remember if you set a reputation of always having enough float and cash, you will get more returning customers thereby boosting your commissions.
Challenges of running a mobile money business in Uganda
Like any other business, running a mobile money business has its own challenges as discussed below:
The business is becoming flooded every year as new agents are entering the market hence competition. Today you can find mobile money kiosks in every corner of the country.
There is also a security risk of fraud by conmen. These conmen target mobile money agents because they know they handle lots of cash. There’s a case of a boda boda man who went to a mobile money outlet and asked her to deposit UGX 1.2M on a certain number. The operator faithfully did so as he pretended to count the cash. As the operator was waiting for the money, he grabbed his motorcycle and disappeared without paying. Tip: Never initiate any transaction before receiving cash from the customer.
3. Theft / Cash robbery
There are instances where after a certain period of time, the operator has to bank the money. Sometimes wrong elements target these operators while on their way to bank or home and rob them of cash. In a similar way some operators handle their PINs in an open way exposing it to thieves. These thieves would later find a way of stealing the phone used for transactions and would immediately cash out the available balance since they already have access to the PIN. Handling cash should be done secretively to avoid such robbery/theft cases.
4. Dishonest operators
Some dishonest operators will collude with fraudsters and create a loophole to defraud their employer/boss and then will blame it on unintentional mistakes. This is very common and I recently witnessed an operator who staged his own thug attack and defrauded his boss of UGX 6M.
5. Fake / Counterfeit money scams
This is a widely spread problem especially urban areas like Kampala. Fake money lords always approach mobile money operators with fake money notes which they send to their own numbers. The operator should able to pay attention to detail and be able to differentiate between original and fake money machine. If possible, it is advisable that you buy a counterfeit money detection/validation device which costs from as low as UGX 30K.
6. Connectivity problems
Some areas, especially rural ones, face network problems where sometimes the service completely goes off hence causing losses.
7. Strict guidelines
Mobile money service providers enforce strict guidelines and failure to follow them can get your agent transaction lines permanently blocked.
8. Mobile Money Tax
The introduction of mobile tax in Uganda has affected mobile operations in Uganda. The demand for mobile money services as dropped as many people have resorted to use of traditional banks or delivering money in person. For example it is cheaper to physically deliver UGX 1M from Kampala to Mukono than using mobile money.
Complementary services/products you can run alongside Mobile Money services
While you run your mobile money business, offering other complementary services at the same time can greatly supplement your income. Below is a list of other services/products you can offer alongside Mobile money services.
1. Airtime sales
For every airtime sale you make, you get a 5% commission on airtel, 4% on MTN and 7% on Africell.
2. Simcard sales
Most telecoms sell simcards at a wholesale price of 1500/- per simcard. You can resell these simcards at retail price of UGX 2000 – 3000/-.
3. Simcard registration
For every successful simcard registration you make, you get a commission of 800/- on MTN and 1000/- on Airtel Uganda. There are set guidelines you have to follow to offer simcard registrations services.
5. Mobile Money Subscriber registration
You also get a commission every time you register someone on MTN mobile money or Airtel Money. You need to acquire some sort of special permission from Mobile Network Operators to carry out this service.
6. Pay bills for customers
Most people here use PayWay or Ezeemoney machines to pay for bills. However acquiring these machines can be too expensive as each of them cost more than UGX 2M. If you can afford them, well and fine, but if you can’t afford them, there are smartphone applications that do exactly what they do. You can pay bills for your customers using just an application.
You are also paid a commission every time you make a transaction through these apps. I will talk about the commission structure of these apps in a separate post. Such applications include ChapChap and others.
Here you will be required to invest in a good 4G smartphone and a fast internet connection to avoid chances of transaction failures due to poor internet connection
7. Sell products on behalf of telecoms
Some people sell promotional products offered by telecoms and they are given a commission off every sale they make. Such products include mobile phones, solar panels (for MTN), modems, MiFis, WiFi routers etc. I however do not know the criteria used for one to become a sales agent of such products. Please contact any MNO service center for more info.
8. Sell soft drinks
If you can afford, buy a small freezer and start selling soft such as soda, mineral water, juice, bushera, munanasi etc as a complementary service. Alternately, you can apply in Coca Cola or Pepsi and get a free fridge where you can cool your drinks from.
9. Offer photocopying services
If you operate in area with a big number of elites for example a university, you can consider buying a 3-in-1 printer and offer photocopying, printing and document scanning services. The cheapest 3-in-1 printer goes for about UGX 150K. If you will offer printing or scanning services, you will need to have a computer or laptop where the operation can be performed. Photocopying alone doesn’t require connecting the device to a computer.
10. Sell Flash disks and Memory cards
Selling these is also a great way to boost your earnings
MTN Mobile Money agent commission structure[table “” not found /]
Airtel Money agent commission structure[table “” not found /]
Africell Money agent commission structure
This section will be updated as soon as I acquire the right information from the Africell team.
How Much Are Mobile Money Operators Paid In Uganda?
Mobile money operators In Uganda are paid between UGX 100K to 250k per month depending on the size of the business. On top of that, some employers give their operators lunch or transport or both. Ensure to pay your operator a decent salary and give them incentives in order for them to work hard. A poorly paid operator will be frustrated making them moody and unkind to customers. An operator’s bad attitude to customers will make your business lose loyal customers.
PROFIT ANALYSIS: How Much Can You Earn From Your Mobile Money Business Per Month?
The amount of money you can make from your business will depend on its location, customer reach and number of completed transactions per day. This means you must setup your kiosk in a busy area where you will able to attract many customers in order to make a substantial profit.
Your earnings are totally dependent on commissions. Typically, if you operate in a busy area, and you have startup float of UGX 2,000,000/-, you can earn a profit of UGX 1,000,000/- and up to UGX 1.5M with a startup float of UGX 3,000,000/-.
If you have a startup float of UGX 2M and your earn UGX 1M per month, and you are employing someone and renting a retail space (shop room), you are likely to take off UGX 150,000/- operator salary and UGX 150,000/- for rent, costing you UGX 300,000/- in operational costs. You will keep UGX 700,000/- as net profits.
If you work in the shop yourself or operate on someone’s veranda as working space, your profits could be higher because you won’t have to pay the operator and the cost of renting veranda space is much cheaper.
The above profitability assumptions do not include profits made from complementary products/services. Mr. Kanyike Daniel, a businessman who has been in the mobile money business since 2012 says the sale of complementary products/services can yield cumulative profits in excess of UGX 300,000/- per month.
There you are! You now have all the information you need on to start a lucrative mobile money business in Uganda. If you have any more questions about this, feel free to leave them in the comments below.
Thank you for reading!
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