Orange Money Agents Suspend Service Due To 60% Commission Reduction

Orange Money Botswana is currently embroiled in disagreement with its distributors and agents over its planned commission cuts and the situation has resulted in service disruption with street-level agents, dealers and retailers temporarily suspending Point-of-Sale (PoS) services as negotiations continue.

Spokesperson for Orange Money Distributors, Sunil Jog said dealers and agents suspended the service after having received notice of the unilateral commission cut decision on 31 August and have attempted to engage the company, but without success.

“Subsequently to receiving this communication, we have attempted to contact Orange to engage them to consider the implication that the cuts would have,” said Jog who added that retailers and agents have supported Orange with the roll out of its mobile money, only for commissions to be cut by 60%.

Orange Money's reasoning for cutting agents' commission is that the service, at the current commission rate, is not making any money.

Mpho Saamagwe, Head of Financial Services at FMCG leader Choppies, affirmed speculation that Orange is not making profits from the mobile money platform hence the commissions cut.

“They said they are not making money… if this model has not been making money, how has it survived for the last ten years,” said Saamagwe.

Orange Money's CEO Seabelo Pilane has since confirmed that services at some dealers and retailers were temporarily unavailable at Point of Sale, as they [Orange Money] undergo contract negotiations with the agents. 

“We recognise and understand that customers are worried about whether this is a wider system issue. Let me confirm that Orange Money services on the whole remain operational and are not down or inaccessible. Majority of the channels outside some dealer Point of Sales remain available and we encourage customers to make use of these during this time. In addition, we are exploring additional avenues to better service our customers,” Pilane stated in a statement share with BW TechZone.

“Please rest assured this bears no impact on service fees and pricing. We apologise for the inconvenience this may cause and remain dedicated to ensuring customers can conveniently transact with Orange Money across all avenues, as well as fair, transparent and mutually beneficial agreements with our partners,” continued Pilane.

According to statistics, Orange Money currently leads the mobile money industry in Botswana with a 30% market share and over P4.5 billion (~$351 million) in transactions since its launch in 2011. 

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