MTN South Africa is making “good progress” in its plans to relaunch mobile money services in South Africa, according to group CEO Rob Shuter.
The JSE-listed telecommunications operator said in November 2018 that it intended to relaunch its Mobile Money platform in South Africa in the first half of 2019, nearly three years after it and its rival, Vodacom, pulled the plug on their offerings in the local market.
Vodacom’s M-Pesa platform continues to be successful in other markets such as Kenya and Tanzania, though the company appears to have no intention of relaunching it in South Africa any time soon, while MTN has also enjoyed success with Mobile Money in several markets across Africa.
South Africa has a relatively well-developed financial services sector, making demand for mobile money platforms less robust than elsewhere on the continent. But Shuter believes there is a business case for the relaunch of MTN Mobile Money in South Africa, provided it targets the rural and peri-urban poor, who are largely reliant on cash payments.
MTN South Africa first launched its Mobile Money platform in 2012. This included partnering with Pick n Pay and Boxer to offer its money remittance platform. The Mobile Money platform gained traction by attracting over two million registered customers. Despite this, the operating costs of providing a mobile money platform had become prohibitive, it said.
Now it’s gearing up to have another go. Shuter said on Thursday, after publication of the group’s interim financial results for the six months to June 2019, that MTN South Africa is working hard to ensure the platform isn’t simply launched with person-to-person payment functionality but that it works across a range of merchants.
KYC
It plans to deploy a “converged wallet platform” from Ericsson and is developing a system for on-boarding customers using a “know-your-customer”, or KYC, platform.
“Most importantly, we have to build the distribution network,” Shuter said. “The customers we are targeting are mostly transacting in cash. It has to be easy to load cash into the e-wallet. This has taken time. But we are confident we will launch in the second half (of 2019).”
He said the mobile money offering will compete head-on with cash payments and it’s therefore important that the company provides a “better-than-cash service”.
“We are not really going to be coming up against all of these digital payment players like Discovery Bank or TymeBank or Bank Zero. We are looking for customers on basic phones in peri-urban and rural areas,” Shuter said. — © 2019 NewsCentral Media