Since January 1, 2025, any cash transaction exceeding 100,000 FCFA is subject to a 1% levy on the total amount. This measure, previously applied only to businesses, has now been extended to all citizens. The goal: to reduce the dominance of cash payments and encourage electronic transactions. In Cotonou and its surroundings, this regulation is changing the habits of economic players, who are increasingly opting for Mobile Money as their primary digital payment method.
Bergedor HADJIHOU
Monday, December 30, 2024. Sitting near the newspaper kiosk next to the Cotonou morgue, Josias, a 35-year-old motorcycle taxi driver, explains in the local Fon language what he understood from the Director General of Taxes’ announcement: “If you make a transaction via Mobile Money, additional fees will be charged.” Beside him, a more informed colleague corrects him: “The measure does not apply to money transfers but only to direct payment transactions. For example, if I buy roofing sheets or cement for more than 100,000 FCFA, it is better to pay via mobile phone since this is not considered a cash payment,” he clarifies, reassuring his friend.
Besides Mobile Money payments, users also have the option of using checks or making bank transfers.
In Godomey, a district of Abomey-Calavi, it is 9 a.m. In front of his ready-to-wear shop, Éclou Elias Koffi welcomes his first customer of the day on Friday, January 3, 2025. He offers different payment options, emphasizing Mobile Money: “You can pay through my Mobile Money merchant account. By using this account, you won’t have to pay withdrawal fees. Some customers transfer money from their bank account to their Mobile Money account to pay for their purchases. However, I don’t accept checks, as they waste my time at the bank,” he explains. For his domestic customers making online purchases, Koffi also offers Mobile Money payments upon delivery.
Dedicated Shops and Kiosks…
Today, Mobile Money is the most widespread electronic money service in Benin. Dedicated shops and kiosks have multiplied across the country. Christelle Akuélé Ayosso, president of the Network Association of Digital Financial Services E-Merchants, notes: “Initially, people were hesitant, but Mobile Money has gradually become a habit for Beninese citizens. This government measure has accelerated its adoption.” Gaston Mawanou, a Mobile Money e-merchant, confirms this trend: “People no longer hesitate to deposit large sums on their phones for payments. However, as soon as there is a network outage, users withdraw their money and revert to cash. This shows that trust in the system still needs to be strengthened.”
The government’s decision aims to limit the use of cash to promote electronic payments and strengthen financial inclusion. The BCEAO report on financial inclusion in the UEMOA region, published in October 2023, shows that Benin has the highest banking rate in the region at 35.7%.
To maintain this momentum, the 2025 finance law introduced this taxation on cash payments, thereby encouraging citizens to open bank accounts, use microfinance institutions, or register with electronic money providers.
According to the Regulatory Authority for Electronic Communications and Postal Services (ARCEP), the use of electronic payments has surged in Benin. Between 2022 and 2023, the volume of transactions increased by 27.03%, and their value by 85.2%, reaching 123.6 million operations for a total amount of 833.6 billion FCFA.
Benin Still Lagging Behind
Introduced in Benin in 2010 with a single operator, Mobile Money has since diversified with three providers: MTN Mobile Money, Moov Money, and Celtiis Cash. Despite notable growth, Benin still lags behind countries like Senegal.
André Sêvo, a financial engineering expert, explains: “Electronic money has not yet reached its full potential in Benin. Despite its growth, the room for improvement remains significant. Authorities must support this sector to maximize its benefits.”
However, several challenges remain: monitoring transactions by monetary authorities, combating money laundering, ensuring platform stability, protecting data confidentiality, and improving internet access. These factors are essential to guarantee the success and reliability of Mobile Money in Benin.
