The verdict in three sentences
Mobile money fees are not just the headline rate: you must weigh collection, cash-out and payout together. In Kampala and Kigali, rates sit close across MTN MoMo and Airtel Money but coverage differs by customer base. On real volumes, a 0.8-point gap equals millions in local currency per year of margin.
Breaking down the true merchant cost
The total cost of a rail for a merchant is three bricks, not just the collection rate.
| Operator | Collection | Cash-out to bank | Vendor payout | KYC tier-1 limit |
|---|---|---|---|---|
| MTN MoMo merchant | ~1.5-2.0 % | Tiered fee | ~1.5 % | ~UGX 1m/day |
| Airtel Money merchant | ~1.5 % | Tiered fee | ~1.5 % | ~UGX 1m/day |
| Bank transfer (direct) | ~0.5 % + fixed | n/a | n/a | per bank |
| Card (fallback) | ~2.5 % + fixed | via acquirer | n/a | per bank |
A merchant who takes only one wallet pays predictably, but may lose customers equipped only on the other. The right reflex: offer the cheapest/most-covered wallet by default and the other as second, while watching the weighted average rate.
The real impact on margin
What matters is cost per order and its annual total. Here is the effect of a fee gap across average baskets.
| Average basket | 0.8 pt gap/order | 900 orders/month | Over 12 months |
|---|---|---|---|
| UGX 18,000 | UGX 144 | UGX 129,600 | UGX 1,555,200 |
| UGX 30,000 | UGX 240 | UGX 216,000 | UGX 2,592,000 |
| UGX 45,000 | UGX 360 | UGX 324,000 | UGX 3,888,000 |
| UGX 70,000 | UGX 560 | UGX 504,000 | UGX 6,048,000 |
The lesson: the higher the basket, the more the rail choice weighs. For a high-basket merchant, routing to the cheaper operator (when the customer can choose) can free up millions per year.
Mini case study
Grace runs an online grocery in Kigali. Average basket RWF 12,000, 900 orders/month, i.e. RWF 10,800,000 in volume. Initially everything runs on one wallet at ~1.8 %, i.e. RWF 194,400/month in fees.
By adding the cheaper-covered wallet by default (~1.0-1.5 %) and leaving the other as an option, 60 % of volume shifts. The weighted average rate drops to ~1.4 %, i.e. ~RWF 151,200/month in fees: a saving of ~RWF 43,200/month, RWF 518,400/year. On top, free cash-out thresholds save her more per month in withdrawal fees. Grace changed no prices: she just opened the right payment flow.
Need a professional website?
Kolonell builds websites that attract clients, optimized for the Sénégalese market. Free quote in 2 minutes.
FAQ
Is one wallet always cheaper?
On collection, rates sit close between MTN MoMo and Airtel Money in Uganda and Rwanda in 2026 (order of magnitude). If your base is mostly on one wallet, forcing the other costs sales; the ideal is a mix with the best-covered wallet by default.
What do KYC tiers change?
Tier-1 KYC caps amounts (~UGX 1m/day depending on operator). For high baskets or big volume, moving merchant accounts to tier 2 avoids blocks and raises limits.
Should I pass fees to the customer?
Risky: showing a mobile money surcharge raises abandonment. Better route to the cheaper operator and absorb an optimised average rate than surprise the customer at checkout.
How do I track my weighted average rate?
Compute monthly: (total fees / total volume). That single figure reveals if your operator mix is drifting. A 0.3-point gap is enough to justify re-balancing.
Is the card fallback worth its cost?
At ~2.5 % + fixed, card costs more, but it captures the diaspora and customers without mobile money. Keep it as a secondary option, not default, so it does not inflate your average rate.
Let's talk about your project. We can audit your operator mix and route each payment to the cheapest without losing customers. WhatsApp +221 77 596 93 33.
Mohamed Bah
Fondateur, Kolonell
Passionate about digital and entrepreneurship in Africa, Mohamed has been helping Sénégalese businesses with their digital transformation since 2020. Founder of Kolonell, he believes every SME deserves a professional and accessible online présence.
