Before You Fall Into Recharge Card Business Scam, Read This

By Dipo Olowookere

I have read several times about some Nigerians lamenting being scammed by fraudsters who claim they can go into recharge business by selling in bulk with as low as N10,000.

Each time I read or hear about victims crying about being scammed, I say to myself that they fell for it because they were ignorant and failed to do at least a bit of research before parting away with their hard-earned money.

The purpose of this article is to educate you on some basics of the recharge card business so that no one can fool you next time about it.

It is important I state that recharge card business is capital intensive, especially if you want to make huge profit.

First, none of the GSM network provider sells recharge cards in bulk directly to individuals or small scale sellers. They sell their recharge card pins directly to dealers, who have registered with them and must have millions of Naira to invest into the business.

In some cases, if not most, banks stand in as guarantor for these dealers because dealers are given targets to meet each month. Some networks, like MTN, give their dealers N1 billion turnover per month.

Now, when dealers buy these recharge card pins, which are then printed in cards and papers, they sell to those called the sub-dealers. Dealers also sell the recharge card pins to sub-dealers as Virtual Top Up (VTU).

In some cases, some of these sub-dealers buy recharge cards worth N10-50 million daily from dealers to resell to those who hawk the cards to retailers (those who sell the product under umbrellas by the roadsides, shops and others).

Recharge Card Prices

The prices of recharge cards are influenced by demand and supply. When there is a huge demand for a network’s recharge card, the price goes up because it is scarce in the market. However, when there is less demand for it, the price drops.

In most cases, the prices of recharge cards go up at the beginning of the month and drops at the end of the month. This is because at the end of the month, most dealers are after meeting their targets and would sell at a lower rate in order to get the commission network providers give to dealers who meet their targets.

But MTN, which is the market leader, has somehow stabilised its price at the market unlike in the past.

From my investigation, MTN sells its N100 recharge card to dealers at N96 and it expects them to sell to sub-dealers and retailers at N96.50k. It came up with this policy so as to stop the sale of its cards above the face value like it happened in the past where the N100 voucher was sold for N110.

For Airtel, the price ranges from N94.50k to N95.50k, depending on who is selling it and the volume being purchased.

For Etisalat, the price ranges from N94 to N95, while Glo goes for N90 to N92.

In recharge card business, the prices of other card denominations are calculated using the price of the N100 cards.

If anyone approaches you to say he can get you recharge cards of any network at rates about N3-5 below the above prices, you should raise a red flag.

Also, if anyone says you can start printing recharge cards as low as N10,000, you should raise an eyebrow because no network sells their recharge card pins to sub-dealers or retailers, but dealers alone, who are like partners in the business with them. In fact, the network providers call their dealers Trade Partners.

If you require further information or clarification, please feel free to use the comment box.