They say imitation is the best form of flattery, so I guess that means O’mari adulates InnBucks. It appears the flat fee for unlimited transactions model is the new hotness. All is fair in business; let them inspire each other.
Earlier this month, O’mari introduced what they are calling the O’mari USD Wallet Mahala Bundle. It works like this:
You buy a monthly bundle for just US$1, and throughout that month, you will not be charged for Cash Outs, Sending Money, and Payments. Your transactions can add up to $500 with that bundle.
If you send money to someone, they will need to purchase a bundle of their own if they want to cash out for free.
The eagle-eyed among you will have noticed that this all sounds familiar. This is exactly like InnBucks’ subscription model, except that O’mari calls its subscription a bundle.
Unfortunately, just like with InnBucks, there is a significant caveat – Mthuli doesn’t play that game.
This means although O’mari won’t charge you for these transactions, Mthuli will want his IMT Tax on each and every transaction. So it’s a $1 subscription fee plus 2% per transaction. Which is not as cool as it should have been.
Caveat
The other caveat is that not everyone stands to save with the O’mari USD Wallet Mahala Bundle.
See, O’mari normally charges 1.3% to send money, 1.7% to cash out, and 1.3% for bill and merchant payments. That’s all excluding IMT Tax.
That means your charges payable to O’mari reach $1 when you send $76.92.
So, if we say you’re only sending money or paying bills and merchants without cashing out, you only stand to benefit from the new bundle if you send/pay more than $76.92 per month.
If your transactions don’t get that high, then don’t bother with the Mahala Bundle. We deduced that most people wouldn’t benefit from the $1 subscription/bundle back when InnBucks launched theirs.
In the week ending 24 May 2024, there were 7,784,955 mobile money transactions worth ZiG1,001,233,757.11, making for an average transaction value of ZiG128.61. Multiply that by 4 to get a monthly fee and you get ZiG514.44 (~US$37).
We also looked at the quarterly report for Q1 2024 which was done in the ZWL days and even then, the average transaction values were less than $50.
This likely means most people will be paying more in transaction fees under the subscription/bundle model than they would by just paying per transaction.
However, the beauty in O’mari’s solution is that you have a choice. The Mahala Bundle is optional, and so if you know that your monthly transactions won’t get to $76.92, you just don’t buy the bundle.
InnBucks does not offer such an option. Everyone pays the $1 subscription fee, regardless of whether or not they would have paid less in the old regime.
New norm?
The subscription model could become the standard in the mobile money sector. I am certain we are going to see more players copy the model with tweaks of their own.
InnBucks pioneered it, but O’mari has the better deal for end-users at the moment because it’s opt-in and not mandatory.
However, InnBucks has the edge when it comes to high spenders. InnBucks offers unlimited transactions and does not top out at $500 like O’mari. Okay, unlimited means at most $2000, but that has to do with Mthuli’s mobile money imposed limits.
Do note that O’mari’s Mahala Bundle goes away at the end of January 2025. Hopefully, it will be renewed.
It will be interesting to see if EcoCash follows down this road.
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