5 Reasons not to link your Bank and Mobile money accounts

Safaricom, the mobile money market leader with M-Pesa with 19 million customers has partnerships with 30 banks and 160 financial institutions as per their 2014 annual report that notes The new (API) platform (launched in January 2014) helped streamline operations for businesses that disburse staff salaries through M-PESA, as well as those that receive payments through M-PESA and need to move cash to their bank accounts on a regular basis. 

It seems to  very convenient to link your bank to your mobile money account – so that you can top-up your mobile money account. More so when you really need it in an emergency, or late at night or when on the road far away from any mobile money agent – but with just a few clicks on your phone, you get the cash you need to facilitate whatever need.

But there are some issues to consider about having the convenience of drawing cash from your bank account sraight on to your phone.

1. It drains savings. Looking at my M-Pesa statement at the Selfcare page on the Safaricom site, most of the activity that I use M-Pesa for is for payments out. All deposits are made with a purpose, usually to pay out a corresponding amount soon after either as remittance, utility bills, airtime, meals, repairs etc.  It is easier to pay out money than build savings, and there are few savings options like M-Shwari, compared to the hundreds of expense item ones.

2. It is costly, with banks charging about $1 (Kshs 75-250) for customers to tap their phones and do the transfer from bank to mobile money. It costs much less, or is free to withdrawal cash from a bank ATM and deposit it at a mobile money agent.

3. Customers inevitably have things go wrong with their bank accounts – from misplaced funds to banks changing their terms or costs. What is  a transaction fails? or money  is sent to the wrong payee? Who do you complain to? You’re better off dealing  with customer service at one or the other, but not at both a mobile company and a bank

4. Banks may have less trust than telcos in terms of being custodians of small amounts of funds.

.. if you leave Kshs 1,000 (~$12) in your M-Pesa account it will be there until you use it, with no phantom charges eating it away (it won’t stay in your phone for 6 months). But if you leave the same Kshs 1,000 in your bank account for a few months, the money will be exhausted by various tariffs like ledger fees, dormant account fees, minimum balance fees and the account will be drained out and shut down.

5. Banks change their terms and conditions too often. M-Pesa tariffs were revised again this week after almost two years in a  very public way. Yet banks make several changes and don’t even inform customers till they see they stumble on new charges on their statements, or go to the bank and find that a service has been cancelled or changed.

13 thoughts on “5 Reasons not to link your Bank and Mobile money accounts

  1. airlines

    whoah this blog is fantastic i love reading your articles.
    Stay up the good work! You know, many individuals are hunting round for this information, you could aid them greatly.

    1. bankelele Post author

      Great convenience..but it’s faster to drain your bank a/c than build it up 🙁

    2. bankelele Post author

      ATM’s are limited in what they can do. Also counties have made them a lot more expensive to deploy

  2. Liz

    Unless you are standing at the atm when you want to make a mobile transaction, you have to actually factor in the cost of getting to the atm including the time, them if you are making a payment the cost of going to wherever it is to make that payment visa vie doing it through mobile banking….trust me my friend it is not cheaper.

    1. bankelele Post author

      True. The cost of getting to an ATM could be great, but it affords you some time to think of an easier way to solve the problem, than clicking the money out of your bank in a few minutes

  3. Gicharu Ndung'u

    Good topic, but point 4 and 5 seem lost, or rather not well thought out. Does mobile banking or not affect banks T&C?

    Supporting Telcos even, superior customer support, clear charges and change management etcetera.

    1. bankelele Post author

      How many times does M-Pesa change their tariffs? Maybe every 2 or 3 years. They are also limited to how they make money from your by 2 or 3 transactional methods, while your bank has dozens of charges they can levy against your account, for the privilege of being their customer.

  4. cherasse

    Iam very happy when I read your blog!
    you always have a good news for us and now I know five reasons for chosing the mobile bank…
    So i have a question do you have sommes ideas about resistant for adaption of mobile bank in other countries like Congo brazzaville, Gabon and so one?
    please I need that information.

    1. bankelele Post author

      There are some papers on mobile money adoption in different African countries – I think by GSMA and the World Bank

    1. bankelele Post author

      A few years ago, banks fought Mpesa. Now about 30 of them have enabled their customers to transfer funds from their accounts to Mpesa

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