How UBA is Charging Unjustified E-Banking Fees – The “Waakye Seller” Example Will Blow Your Mind!

The “Waakye” seller demonstrates a stark contrast to the practices of banks in Ghana. This beloved food vendor typically does not charge customers for using their plates to eat. Neither do they levy a fee for simply enjoying the aroma of the delicious meal you’ve purchased while heading home. In fact, the Waakye seller doesn’t charge extra for the act of serving you Waakye, whether it’s piping hot or has cooled down.

Sadly, the reality with banks in Ghana paints a different picture, with many customers feeling exploited by what can only be described as exorbitant and often unjustified charges. To put it bluntly, these fees can feel like a form of theft.

One bank that has come under scrutiny for these practices is the United Bank for Africa (UBA). The rationale behind their charges often appears illogical and difficult to comprehend. This emerging pattern of extracting funds from unsuspecting banking clients seems to be a widespread issue affecting numerous Ghanaians, regardless of their chosen bank.

Consider the monthly card maintenance fee of GHS 7.00 levied by UBA. Customers understandably question the necessity of such a charge. If a Waakye seller invests in new cooking utensils to prepare and serve their customers, they don’t impose an additional fee on buyers to cover these costs. Instead, this purchase is treated as a business asset, with its value depreciated over time – a cost not directly passed on to the customer. Why charge of card maintenance fees when you charge UBA customers for every transaction made with the UBA VISA and/or MasterCard Card and other cards you offer customers. What are the transactions charged slapped on Card payments and transfers used for? One could even imagine the Waakye seller setting aside a portion of their profits to eventually cover the cost of these utensils.

In contrast, with UBA, and indeed many other banks, customers are charged for the issuance of their cards and then subjected to recurring monthly maintenance fees. It begs the question: what maintenance is being performed on a card that remains in the customer’s possession? The banks’ operational systems are their own assets, and their upkeep should logically be covered by profits generated from the core banking services that customers initially signed up for.

Adding to this burden is a monthly bank service fee of GHS 4.00. The description for this debit charge is often vague and cryptic, as seen with UBA’s “MM/BTW IFO”. The fundamental reasons for these recurring charges remain unclear to many customers.

Furthermore, UBA charges at least GHS 3.00 monthly for SMS alerts, labelled as “EBUNDLE”. Given UBA’s substantial size and large customer base, they undoubtedly procure SMS services at significantly reduced bulk rates. Therefore, the cost of individual SMS alerts to customers should be considerably lower, unless this is a deliberate strategy to inflate revenue. The current SMS service often lacks transparency, with customers being charged a flat rate regardless of the number of transaction alerts received in a month. This means a customer pays the same fee whether they receive one SMS or none. A fairer and more ethical approach would be for the bank to charge a per-SMS rate in Ghana Pesewas, ensuring customers are billed based on actual usage. Additionally, banks should absorb the costs of sending non-essential SMS like birthday greetings and promotional messages.

Shockingly, a check of Mnotify, a bulk SMS service provider in Ghana, showed that enterprises such as UBA pay GHS 100 for 4,400 SMS messages. However, if UBA uses this service from Mnotify and opts for a half-year SMS bundle, it will pay GHS 10,000 for 645,000 SMS messages for 6 months.

This translates to approximately GHS 0.015 per SMS sent to a customer by UBA. This means that the bank must send each customer a total of 193.5 SMS messages a month at the cost of GHS 3.00, which they are charging us as customers.

I wonder how many UBA customers receive 50 SMS alerts a month. As a customer, I receive fewer than 20 SMS messages a month. Assuming I receive 50 SMS messages a month, my SMS charges (E-BUNDLE) should be GHS 0.015 * 50, which would cost GHS 0.75, approximately GHS 0.80.

Based on these charges, a UBA customer can be debited an average of GHS 14.00 each month (GHS 7.00 + GHS 4.00 + GHS 3.00). While this might seem insignificant individually, it accumulates to a substantial annual cost of GHS 168.00 per customer (GHS 14.00 x 12 months). To grasp the scale of this revenue generation from these supplementary fees, let’s consider a hypothetical customer base of 250,000 for UBA.

Even without precise data on the customer numbers of each bank in Ghana, using this conservative estimate of 250,000 customers for UBA illustrates the significant financial impact on consumers. This translates to a staggering GHS 42,000,000 (GHS 168.00 * 250,000 customers) generated annually from what are essentially non-core banking services – money that customers should not be paying so much for, individually or collectively.

It’s worth noting that mobile money services like MTN Momo, AT Cash, and Telecel Cash do not impose such charges, despite often being used more frequently than traditional banking services. Instead of making their services more affordable and accessible without these extra costs, banks appear to be devising ways to deplete customer balances.

READ: MTN Ghana & Access Bank Launch Credit Score System for Smartphone Financing

UBA and other banks in Ghana must reconsider their approach. They should focus on providing innovative and value-driven banking services and generate revenue from these core offerings, rather than relying on SMS alerts, card maintenance fees, and other questionable charges on the savings and current accounts of their customers under the guise of providing banking services.

The Bank of Ghana, the Ministry of Finance, and the government of Ghana should intervene to ensure that banks do not impose such unreasonable fees for these auxiliary services. If this trend continues, customers may increasingly opt out of traditional banking services, especially if salary payments and other transactions can be seamlessly conducted through mobile money platforms, a shift already being embraced by some companies. It is imperative to put an end to these excessive bank charges.

As a worried customer of the bank, this is the only means I have for now to get my voice and the voices of many more to be heard.

Source: Wisdom HAMMOND

A worried UBA customer.