Operator-led mobile money services in South Africa have yet to gain traction

Operator-led mobile money services in South Africa have failed to gain traction because they have faced competition from mass retail chains and banks, which have been more successful in addressing the needs of both the unbanked and banked populations.

1. Operators need to reposition their mobile money services in order to appeal to specific use cases that are not being adequately met in the market

Operator-led mobile services have had limited appeal in South Africa, despite attempts to rekindle interest by relaunching them.

According to Analysys Mason's latest research, the number of active users of operator-led traditional mobile money services in South Africa was under 200 000 in 2015, whereas financial institution-led mobile money services had close to 1 million active users.

Vodacom and MTN relaunched their mobile money services in 2014 (following initial launches in 2010 and 2012, respectively) in a bid to spur consumer interest and adoption.

We project adoption of operator-led money services to remain low, with the active share of registered users reaching just over 300 000 by 2020.

2. Intense competition and regulatory constraints have limited operators' share of the mobile money market

South Africa has the highest level of financial inclusion in Africa 70% of the adult population in South Africa have a bank account and financial institutions are in a better position than mobile operators to offer mobile financial services to their current customer base.

The most popular mobile money service adopted by smartphones users is First National Bank's (FNB's) e-wallet service a preference expressed by 19% of the respondents interviewed for our forthcoming Connected Consumer Survey study in South Africa.

3. International remittances and innovation in advanced wallet services represent an emerging opportunity for operators to differentiate their mobile money offerings

If you would like to speak to Devine please email me Eva Sulirova at press@analysysmason.com.

See more at: http://www.analysysmason.com/South-Africa-mobile-money-Apr2016