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Stats: 2,382,510 members, 5,315,582 topics. Date: Friday, 13 December 2019 at 01:11 PM
|Customers Groan As Opay Introduces 1% Transaction Fee by BigCabal: 9:32am On Nov 08|
Beginning Wednesday, OPay, the Nigerian fintech platform, has increased its transaction fees for bank transfers. Previously, the app charged N10 when users made transactions from their OPay wallets to regular bank accounts. This fee will no longer apply, instead, the app will now charge N45 for the first transaction a user makes in a day. Subsequent transactions will incur a flat 1% processing fee.
For example, if an OPay user wants to send N100,000 from the app to a regular bank, instead of paying N10 as the transaction fee, the user will now pay N1000 (1%) as a processing fee. But if this is the first transaction that the user is making that day, they would pay N45 as transaction fee.
Interestingly, the new rates are actually a revision. On Tuesday, the company had originally raised the charge to 2% and a minimum rate of N15 per transaction. In simpler terms, users would have paid 2% transaction fees for any transfers to banks.
But after negative reactions from OPay users the company was forced to reconsider the rate, setting it at 1% and a minimum of N45 per transaction.
OPay is not the first fintech to increase transaction charges in the last few months. Carbon did the reverse in August when it introduced charges for inbound transactions. The company announced a 1% transaction fee for debit card transfers to Carbon Wallets. It used to be free. But Carbon, at the time, said the zero-fee approach was no longer sustainable as more people used its Wallet feature. However, it continues to support a flat N10 charge for transfers from Wallets.
“This particular service came at a significant cost to us as we pay fees to your debit card issuer and payment processors for every card top-up,” the company wrote.
But unlike Carbon, OPay’s decision to increase transaction fees comes as a shock to its users who are spoiled with discounts. For one thing, users were not informed before the change was made. Customers found out about the original 2% charge on their own over the last two days when they tried to make transfers.
The company has now changed its rates twice in just two days and the changes were applied immediately. This is quite disruptive for customers, but it shows the level of flexibility fintech startups have.
Beyond the shock, the rate also seems odd. In Nigeria, sending money from one bank to another bank incurs N52.5 for every transaction. OPay’s N10 transaction fee was the main reason many people opt to use it for funds transfer. But now, that advantage is gone.
With the introduction of the 1% fee, it is now more expensive to make funds transfer from OPay than doing so with regular banking apps.
This could impact not just bank transfers but how people use the app’s other services, especially OWealth, its investment product. For as little as N10,000, OWealth invests in relatively risk-free products like treasury bills and mutual funds and promises OPay users 10% interest annually.
But depending on how much a user invests, the new OPay transaction charge means they could lose part or all of their returns when they try to transfer the money out of the app when maturity is due.
That’s a scary prospect for many users, and some have already started facing this challenge. In a tweet that predates the announcement of the new charges, one OPay user claimed he incurred N18,000 withdrawal charges to when he tried to transfer N900,000 funds he invested in OWealth. According to him, he was expecting “6k to 7k interest a Month
So why has OPay decided to increase its transaction charges?
In an official response, the company did not say exactly why it increased the transaction fee. But it is hoping that the move will lead to more financial activity within the OPay ecosystem. “Peer-to-peer transactions do not attract any fees within the OPay app,” Iniabasi Akpan, OPay’s Country Manager told TechCabal in an emailed statement.
“Evidently, with the new policy, users are encouraged to do more transfers and payments within the app,” he added.
Meanwhile, the company said “OWealth users should not be affected” by the new charges as it is developing its technology to “accommodate this change.”
Akpan said his company is working on a “plan to resolve any issue affecting OWealth users.”
Asked if this could mean an end to the many bonuses and subsidies that are associated with OPay and its verticals, Akpan said: “We are rest assured business will continue as usual.”
1 Like 1 Share
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by popsy2(m): 9:34am On Nov 08|
The harvest is now ripe I guess.
60 Likes 2 Shares
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by Charleys: 9:36am On Nov 08|
Them don start, in other news why are banks charging #50 on every POS transaction.
27 Likes 2 Shares
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by BigCabal: 9:38am On Nov 08|
In a way, most people saw this coming. Most of their packages were too good to be true.
67 Likes 1 Share
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by popsy2(m): 9:49am On Nov 08|
I warned peeps that what they are playing at is to create a monopoly. Once they achieve that, the ripping off begins.
80 Likes 4 Shares
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by Mood11: 9:51am On Nov 08|
When the devil gives you a cap, he will ask for your head in return.
I am not surprised
94 Likes 4 Shares
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by BigCabal: 9:54am On Nov 08|
The huge turn off with this increment is that it wasn't announced prior. They just came and said it GBAM!
Most companies will say something like "Effective from XYZ date...". I'm not sure this was thought through. It feels like a rushed decision.
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by Litblogger: 9:56am On Nov 08|
Mood11:Haq! You couldn't have said it better.
I use Oride and fear wouldn't allow me save my card details. I have the craziest insecurities when it comes to this O people.
62 Likes 4 Shares
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by popsy2(m): 9:57am On Nov 08|
Since it appears to be a rushed decision, it admits to poor management skills by the operators or a frantic attempt to bring in money to cushion their heavy spending all these while. Their financial war chest is not unlimited after all.
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by BigCabal: 10:00am On Nov 08|
The heavy spending may not be ending anytime soon. They're offering ₦10 for all rides below ₦600 today. They need to review their board of advisors.
19 Likes 1 Share
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by popsy2(m): 10:06am On Nov 08|
Terrible decisions. There is no way they are going to make profit with such rooftop customer acquisition strategy.
They should learn from Jumia. Despite the heavy spending on Ads and other customer acquisition campaigns, they are yet to announce profit after years of being in business.
The day the stop the "awoof" is the day the customers they think they have would peter out.
At the end of the day, good service beats "awoof". Take Glo and MTN as references.
68 Likes 3 Shares
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by BigCabal: 10:41am On Nov 08|
7 Likes 1 Share
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by Hoodbilonia: 2:50pm On Nov 08|
Wen last i fly bike steady. Abt 9months back
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by Authoreety: 2:52pm On Nov 08|
Iv always known they are up to no good
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by LibertyRep: 2:53pm On Nov 08|
This appears as a signals that the company is in distress and might scare away customers.
People have always wondered where the company makes money from to support the mouth watering awoof they dish out every now and then.
Recharge cards on that platform sometimes come with as low as 15% off.
5 Likes 1 Share
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by simple250: 2:57pm On Nov 08|
Nothing is free even in free town .
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by adegeye38(m): 2:57pm On Nov 08|
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by Ennyholar: 2:59pm On Nov 08|
This is the time to switch to Palmpay.
10 for all transactions...
5 Likes 2 Shares
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by olasaad(f): 2:59pm On Nov 08|
Lol just only one ride today, you will be place on normal charges on the next ride.
It's also pathetic that they are now charging at higher rate. You will just see something like 115-250. Lol Opay has now turned to Kope
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by Blankstare(m): 3:03pm On Nov 08|
same here honestly, their freebies to okada riders isn't trusted from day one.
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by mcmbonu: 3:04pm On Nov 08|
Hit Like If you use Opay
Share If you don't
26 Likes 23 Shares
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by groovie(m): 3:05pm On Nov 08|
I guess this is what GOkada saw, and went back to restructure.
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by charles009(m): 3:05pm On Nov 08|
Opay made its market entry with a strategy that aint sustainable.
I was asking a colleague who boarded a taxi for N70, what will happen if this Opay stops this ridiculous low pricing, and she replied, i will immediately stop using them. listen a few folks who can patronize a regular cab on a good day may choose to still use the rest will fall back to where they belong. its a natural law.
Even if the idea is to for massive and quick customer acquisition, native intelligence inherent in us as nigerians makes this a dead on arrival plan. an emergency review of their marketing plan is what is needed to avoid them needing a sort of bail out or rather pack up.
8 Likes 1 Share
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by Dbeautyy(m): 3:06pm On Nov 08|
Hello nairalander, I will advice you desist from this fraudster. I felt it was okay to patronize someone who seems to be serious with his/her business, so I called and we agreed on getting 7gb data. I sent the money the account given and ever since, he stopped picking my calls. His numbers are 09017925805 08132763039. I have the evidence of payment with me.
6 Likes 3 Shares
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by philip0906(m): 3:08pm On Nov 08|
No more freebies...Reality has set in. Time to start recouping their investments
All these startups, need to understand their user personas before taking the deep dive, else they'll just go bust when their users, revolt
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by kutashi: 3:11pm On Nov 08|
Anybody with huge amount of money in his/her wallet should quickly do the needful. It's a sign of distress! Only the magnitude I can talk of
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by Xzbit91: 3:13pm On Nov 08|
You couldn't have said it any better. In business, "awoof" can be a powerful tool to bring in sales if you know how to use it. But as a new comer into the market, the worst thing you can do is use "cheaper prizes" as the primary motivation. It gets your customers addicted to those giveaways to the point of entitlement.
The backlash you get for taking those freebies away will nearly crumble the business.
21 Likes 1 Share
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by NonFarmPayrol: 3:22pm On Nov 08|
People stick to mtn cause of good service
6 Likes 1 Share
|Re: Customers Groan As Opay Introduces 1% Transaction Fee by SalamRushdie: 3:25pm On Nov 08|
Customers should come to Quickteller abeg .Solid quick teller
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