MTN is expected to relaunch its mobile money service from January 2020 in South Africa. The mobile money service, also known as MoMo, will allow customers to send, receive, save money and pay for goods using their mobile phone.
“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,” reads a statement by Godfrey Motsa, the CEO of MTN South Africa.
MoMo will run on the Ericsson Converged Wallet. It would be available to MTN customers at the initial stage, offering basic services such as sending money to any mobile phone number within the country. This would further aid the purchase of prepaid services like electricity and the payment for purchases at selected till points.
Commenting on the relaunch is the Chief Officer of Mobile Financial Services for MTN South Africa, Felix Kamenga who said that the telecoms giant will roll out the service in the country which has an unbanked population of about 11 million people with aims to bridge the gap. He stressed that 50 percent of the adult population remains thinly served.
“MoMo aims to bridge this gap with this innovative mobile money offering, providing a payments solution that encourages financial inclusion,” Kamenga said.
In South Africa, 23.5 percent of its population is considered financially excluded. This means that an estimation of R12 billion is still being kept at home as opposed to financial institutions. The aim of financial inclusion is to get the “unbanked” access to financial systems and services that can aid in poverty alleviation.
MTN, with the use of its mobile money technology, would be bridging the gap between the unbanked and financial institutions. It would also be eliminating the people’s fear for financial institutions which include high bank charges, long hours in banking halls to either deposit or withdraw money and lack of confidence in the financial service sector.
The 2020 relaunch would be in line with the commitment made by the group Chief Executive Officer of MTN, Rob Shuter, in 2018, at a telecoms conference. He had said that the company would relaunch mobile money services in South Africa. The service has been put on hold three years ago.
Shuter, a seasoned banking professional, is currently in the middle of a strategic revamp of Africa’s biggest telecoms group in order to have a return on investments on every service rendered.
In July, MTN subsidiary, Yello Digital Financial Services (YDFS), won a mobile financial services licence from the Central Bank of Nigeria. Thereafter, it launched its mobile financial services in Nigeria to complement existing banking services, targeting 98 million mobile customers. It has over 15, 000 MoMo agents in Nigeria already while it aims 500,000 agents.
“The launch of the YDFS MoMo Agent is especially significant to us. It further demonstrates our commitment to remain focused on enhancing Nigerians’ access to financial services, and in so doing, connect them to what is most important to them.” A statement by Ferdi Moolman, CEO of MTN Nigeria reads.
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