South Africa’s second largest mobile network by subscribers, MTN South Africa, has stopped signing up new Mobile Money customers as it studies the feasibility of the product.
In 2012, MTN partnered with the South African Bank of Athens, Pick n Pay and Boxer stores to launch a mobile money solution enabling the opening of simple bank accounts via phones.
Digital banking company Tyme, which has since been acquired by the Commonwealth Bank of Australia, helped install MTN’s mobile money solution.
In 2014, the operator launched a “Mobile Money Visa” card and a Pick n Pay-branded Sim card.
But MTN is now reviewing its mobile money service.
“MTN is currently in discussion with all relevant stakeholders to explore the feasibility of continuing with this service,” chief consumer officer Larry Annetts said in a statement.
“Furthermore, MTN can confirm that the platform is not available for new customers” said Annetts.
But MTN’s Mobile Money platform has not been shut down, Annetts said on Friday.
Annetts further said “there are approximately 140 000 customers that are currently on board”.
However, this figure indicates a fall in users of the service as MTN and Pick n Pay said in a statement in 2014 that 2m customers were previously using the mobile money product.
MTN’s feasibility review of its mobile money service comes after Vodacom shut down its M-Pesa service earlier this year. M-Pesa managed to notch up only 76 000 users in South Africa.
When Vodacom launched M-Pesa in South Africa in 2010, it had a lofty target of reaching 10m customers.
Mobile money, though, has thrived in relatively unbanked African markets such as Kenya, where network Safaricom has over 11m users.
And while Vodacom shut down M-Pesa in South Africa, the company is still operating the product in African markets such as Tanzania, Lesotho and Mozambique.
For MTN, mobile money has also been performing outside of South Africa as the company reported in its recent interim results that customers increased 5% to 36,5m across 15 countries.
Revenue from mobile money services for the MTN Group across Africa also increased by 40,8% to R1,3bn when compared to June 2015, according to the company’s latest interim results.