Bradwin Roper, newly appointed CEO of MTN’s financial services unit in South Africa, has big plans for the company’s fintech offering, called Mobile Money (MoMo).

This includes exposing an application programming interface, or API, to allow third-party developers to build on the platform. Details of the API and how it will work will be announced in the coming weeks, said Roper.

Roper, who was previously CEO of FNB’s telecommunications business, FNB Connect, told TechCentral in an interview on Wednesday that this, the third iteration of MoMo South Africa, offers more functionality to users while delivering increased value through lower costs.

MTN South Africa is stepping up its focus on MoMo, even launching its own Android-powered point-of-sale device for merchants. This comes as the service reaches its eight millionth registered user – MTN won’t disclose how many of these users are active, though across all its markets in Africa, the figure for active users, measured on a 30-day basis, is 69 million.

“MoMo South Africa is in a rebirth. This is our third go at it. Previously, anyone who has tried to show up in the mobile money space has found it difficult because the banks here are sophisticated. But we are now embarking on a sophisticated play with MoMo.”

The service is being pitched particularly – but not exclusively – at the estimated 4.7 million people active in South Africa’s informal sector, who contribute 5-6% to GDP, Roper said. Almost a quarter of this market is made up of informal merchants.

Displacing cash

“If we can solve for trade workers, we can capture a big part of the informal market and solve for private household workers and nuances around agriculture as well,” said Roper.

Part of MTN’s ambition is to reduce South Africans’ reliance on cash. Roper said that research conducted by BRM Statistics shows that 35% of transactions by value in South Africa are still cash based, down from 57% in 2017, while card transactions have risen from 38% then to 56% now. This is largely due to work done by South Africa’s big banks, including through the development of e-wallets, Roper said.

Key to MoMo’s strategy is delivering value to customers who would otherwise be charged for services such as loading money or buying airtime and electricity, all of which are free on MoMo. Use of the service is also zero-rated, but only on the MTN network (subscribers to other networks can still use MoMo, but will pay for the data they use).

Read: Emerging market mobile money transactions to top $2-trillion by 2027

“Is MoMo a charity? No, we are a modernised fintech, developed with open APIs and partnering with a range of partners without legacy incumbent systems. MoMo has been built on fresh architecture in an ‘agile’ development manner. We vend prepaid electricity and Lotto and we get a commission on those,” said Roper on one of the ways MoMo makes money.

Although withdrawing money from a MoMo wallet attracts a fee, converting MoMo credits to vouchers for purchases at Shoprite Group supermarkets (including Checkers), Pick n Pay, KFC, Nando’s and Spur is free, with more partnerships in the pipeline. MoMo also works with Zapper QR codes, allowing users to scan a code at the point of sale to purchase goods.

Many informal traders either work in remote areas or move around a lot in their businesses. Carrying cash is dangerous, and Roper hopes that moving more merchants, and their clients, to MoMo will help reduce those risks. But a reliable internet connection is critical for accepting electronic payments.

MoMo solves this problem by offering a dual-Sim, Wi-Fi-capable point-of-sale terminal at a lease cost of R200/month. The service leans on MTN’s network to offer zero-rated connectivity, while the additional Sim slot ensures connectivity even if MTN is unavailable. Traders can use real-time reporting features on the terminal, too, to keep abreast of their transactions.

“If you want to be a fintech in South Africa, you cannot ignore the POS device. It’s a ticket to the game,” Roper said. “One of the things I am hoping to solve for is the residual 35% still using cash. It’s been quite sticky.”

Read: MTN MoMo users can now ‘cash out’ at Nedbank ATMs

While MoMo South Africa’s value proposition is enticing, stiff competition from the banking sector will keep Roper and his team on their toes. Start-ups such as Yoco and iKhokha, along with social media firms like Meta Platforms – the parent of Facebook and WhatsApp – and rival telecoms operators are also muscling into the market.