The verdict in three sentences
Collecting NGN 1,000,000 online costs far more than the advertised commission: once you add commissions, VAT, payout fees, FX markup and disputes, the effective rate lands between 1.8 and 3%, i.e. NGN 18,000 to 30,000. Your payment mix (cheap mobile money vs pricier card) is the main lever. This article simulates every line so you know your real cost to the naira.
Fee breakdown on NGN 1,000,000
Simulation for a merchant collecting NGN 1,000,000 with a NGN 20,000 average basket (50 transactions), 80% mobile money/transfer and 20% card.
| Line item | Basis | Cost |
|---|---|---|
| Mobile/transfer commission (1%) | NGN 800,000 | NGN 8,000 |
| Card commission (2.9%) | NGN 200,000 | NGN 5,800 |
| Payout fees (10 × 250) | 10 transfers | NGN 2,500 |
| Disputes (1 × 4,000) | 1 case | NGN 4,000 |
| VAT (7.5% on fees) | NGN 20,300 | NGN 1,523 |
| Total | — | NGN 21,823 |
The effective rate comes to 2.2%, far from the "1%" of mobile money. Card commission, though on only a fifth of volume, weighs nearly as much as mobile money on 80% of volume.
The effect of the card / mobile-money mix
The same million does not cost the same depending on the card share. The higher the card share, the higher the bill.
| Mix (momo / card) | Mobile fees | Card fees | Approx. total |
|---|---|---|---|
| 100% / 0% | NGN 10,000 | NGN 0 | ~NGN 16,500 |
| 80% / 20% | NGN 8,000 | NGN 5,800 | ~NGN 22,000 |
| 60% / 40% | NGN 6,000 | NGN 11,600 | ~NGN 29,500 |
| 40% / 60% | NGN 4,000 | NGN 17,400 | ~NGN 37,000 |
| 0% / 100% | NGN 0 | NGN 29,000 | ~NGN 44,500 |
Pushing mobile money (cheaper and locally preferred) is the first optimisation reflex. Reserve card for international customers with no alternative.
Become a Kolonell referral partner
Need a professional website?
Kolonell builds websites that attract clients, optimized for the Sénégalese market. Free quote in 2 minutes.
If you advise merchants on their payment fees, you already know businesses that need a well-integrated e-commerce site or marketplace. The Kolonell referral (apporteur d'affaires) program pays you for every project you bring, across our full range of service tiers.
| Tier | Sale commission | Recurring |
|---|---|---|
| Showcase site | 15% | 5% recurring |
| E-commerce | 12% | — |
| Marketplace | 10% | — |
| Institutional | 8% | — |
On a NGN-equivalent 2,000,000 FCFA e-commerce project, a referrer earns FCFA 240,000. On a 500,000 FCFA showcase site, that is 75,000 FCFA plus 5% recurring on maintenance. You already talk about payments and fees with merchants: turn those conversations into income.
Mini case study
Ngozi sells fashion online in Lagos and collects NGN 1,000,000 a month, with 35% of sales by card for her diaspora clientele. Her payment bill reaches roughly NGN 30,000/month (3%). By adding a prominent transfer/mobile button and nudging local customers to use it, she shifts the card share from 35% to 15%, cutting her bill to about NGN 21,000 — NGN 9,000 saved a month, or NGN 108,000 a year.
FAQ
Why does card cost more than mobile money? Card involves international networks (Visa/Mastercard) and higher fraud risk, hence a 2.5-3% commission versus 1-1.7% for local mobile money.
Is the 2.2% effective rate avoidable? Partly: by maximising mobile money and negotiating fees above a certain volume, a well-optimised merchant can target 1.5 to 1.8% effective on a mostly-local mix.
Should I pass fees on to the customer? Not advisable on local mobile money, which is culturally poorly received. Better to build fees into the price and keep a smooth checkout that limits cart abandonment.
How do I join the referral program? Just contact us to be registered. You get tracking on your leads and are paid on each signed project, per the table above.
Let's talk about your project. Whether you are a merchant or a referral partner, we optimise your fees and reward your recommendations. 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.
