MTN will make a second attempt at capturing the mobile money market in South Africa next month. It has announced that its mobile money service, MoMo, will go live in January 2020, “allowing customers to send, receive, save and spend money as well as pay for goods and services using their mobile phones”.
MoMo is the successor to MTN Mobile Money, which was shut down in South Africa in 2016. This came hard on the heels of Vodacom closing down its Mpesa service in South Africa, despite it being wildly successful in Kenya and Tanzania. Similarly, MTNMobile Money was a major success in Uganda and Ghana, but failed to gain traction in South Africa.
“The operating costs of providing a mobile money platform has become prohibitive,” said Larry Annetts, MTN’s chief consumer officer, in a statement at the time.
World Wide Worx conducted extensive research into the success of these services in other African countries, and concluded that this as based on mobile money meeting a desperate need. In South Africa, the retail money transfer market was well established, and a high proportion of adults had bank accounts, obviating the need for a new form of money transfer. Since the mobile money services were not easy to use, nor cheap in terms of transaction cost, they did not succeed in converting a high proportion of the population. Numerous success factors that were not present in South Africa were also identified in other countries.
The announcement of MoMo’s launch date came as MTN was finalising its engagements with the relevant regulatory bodies and authorities, including the South African Reserve Bank.
MTN said it welcomed the positive conclusion of these engagements and looked forward to making MoMo available to all consumers via USSD functionality on *120*151# (MTN customers can dial *151# for free) as well as via App download in the Google Play store and the Apple App store by 30 January 2020.
“The introduction of this mobile money service is a pivotal step in MTN’s strategy and represents MTN’s participation in the next phase of increasing convergence we are seeing between financial services and mobile technology,” said MTN SA CEO Godfrey Motsa.
“We have been deliberate in selecting best of breed technology to enable MoMo,” he said. “To this end MoMo will run on the Ericsson Converged Wallet and we’re exciting to be partnering with them across the Group.”
Felix Kamenga, MTN SA Chief Officer of Mobile Financial Services, said: “We are delighted to make this payments service available to South Africans as many of our people remain unbanked. Our research shows that approximately 11-million South African’s remain unbanked, while 50% of the adult population remain thinly served. MoMo aims to bridge this gap with this innovative mobile moneyoffering, providing a payments solution that encourages financial inclusion.
“MoMo has been through rigorous testing and we are confident that consumers will reap the benefits of our efforts in this regard. Our investment in our network means that we able to evolve with the ever-changing Fin-Tech landscape, making us the best network for mobile financial service.”
Kamenga also pointed to MTN’s mobile money successes in other African countries. “We have learnt what to do as well as what not to do and we believe that MTN has significant footprint in South Africa to reach underbanked and underserved communities still heavily reliant on cash to transact.
“This represents an MTN Group effort as we worked with our counterparts in other markets, tapping into technical and human resources available from established markets which made this journey easier.”
During the initial phase MoMo will only be available to MTN customers, with basic services, but the company promises “further innovation in early 2020 that aims to bring even more South Africans into the digital economy”.
Users of MoMo do not need to have a bank account but must be South African residents, 18 years or older, with a valid South African ID. Users also need to be active MTN customers to qualify for selected promotional offers.
Initial functionality of MoMo will allow users to:
• Send money to any working cell phone number in SA;
• Buy prepaid services like electricity, data and SMS bundles.
• Pay for purchases at selected till points.
• Perform Cash In and Cash Out transactions at any MTN store or Mobile Money Agents.
No minimum balance will be required. There are no monthly finance charges and no automated debits. MTN customers can get cash back every time they buy something at selected merchants. MTN says there will be a promotional offer of 100% bonus for users who buy MTN Airtime bundles using MoMo.