MTN South Africa relaunched its mobile money service on Thursday, more than three years after ditching a similar offering, as it bets on improved technology to attract millions of South Africans who have limited access to banking services.
Mobile money services have proved hugely popular in parts of Africa, with Kenya’s Safaricom a pioneer of mobile phone cash transfers via its M-Pesa mobile payment service.
MTN will initially offer basic services allowing users to send and receive money via an app or over the mobile network using USSD technology, buy airtime and prepaid electricity, and pay for municipal bills and TV subscriptions.
It will add well-known retail brands to the platform from May, Felix Kamenga, MTN’s South Africa chief officer of mobile financial services, said at the launch of the service in Johannesburg, allowing users to pay for purchases at shops and supermarkets.
Chief Executive Officer Rob Shuter, who has experience in banking, is in the middle of a strategic revamp of Africa’s biggest telecoms group to hunt for returns in everything from financial services, music and video games.
He said in 2018 that the company would relaunch mobile money services in South Africa after canning its previous offer due to prohibitive costs and technology limitations.
Around 11 million South Africans do not have banking facilities, while 50% of the adult population remains thinly served, said Kamenga.
He told journalists and stakeholders that improved technology and a greater openness to digital services, thanks to the foundation laid by digital banking newcomers, made now the right time to relaunch the service.
“The local market is characterised by significant population growth, a youthful demographic, and relatively high levels of data and digital adoption, he said.
“We believe that all these factors, coupled with the unrivalled quality and coverage of our network, bodes well for us to offer a viable mobile money service in South Africa.”
The service, called MoMo and powered by ubank, will run on the Ericsson Converged Wallet platform.
“We have very ambitious plans for the app in terms of the features that we’re going to have. We’re working with a number of service providers that we’re going to bring onto the app,” Kamenga said.