MTN offers its customers new financial options with a revitalised Mobile Money (MoMo) offering.
Though mobile money hasn’t gained the traction in South Africa that it has in East Africa, MTN is hoping to ride a second wave of enthusiasm for mobile payment.
Originally introduced to South Africa in 2012, it flamed out because of high costs and the country’s established financial services. By 2016 it was shuttered, as was Vodacom’s pioneering M-Pesa.
MTN relaunched its MoMo offering last week. It has brought in FNB’s banking wunderkind Bradwin Roper to be its chief financial services officer, and is offering clever insurance packages with Sanlam. That’s without the significant investment by Mastercard in its fintech division.
At present there are 9-million registered MoMo users in South Africa. The new app will focus on remittances and services for small businesses in the spaza industry.
“We live and breathe spaza shops,” says Roper of an estimated R178bn market. Every day about 80% of South Africans interact with one of the 150,000 spaza shops in the country.
By accepting cash deposits for free at MoMo agents, Roper says small business owners will be able to “bank” their hard-earned cash. Traders won’t get robbed on their way home, he adds.
“Actually, it makes the commute home a little bit safer for millions and millions of people who get up at 3am.”
He showed off the new point-of-sale device which can sell airtime, electricity and lottery tickets as well as accept card payments. It takes zero fees for selling vouchers and airtime or data while, unlike banks, it does deposits for free.
In conjunction with MTN’s new MoMo Business Wallet, this is an enabler for a small business, Roper says. “Think of the scale of how we can digitise cash in South Africa.”
The relaunched MTN MoMo South African app makes it easier to sign up for an account.
The MoMo Eazi account requires only a cellphone number and a bank account, not an ID, says Roper.
Of the many new financial packages offered, he called the MyMTN Prepaid Funeral Khava his “favourite child”. It offers prepaid funeral cover for either six or 12 months from R75 and when premiums are paid using MoMo, there will be no service fees.
Think of the scale of how we can digitise cash in South Africa
— Bradwin Roper
MTN is the largest mobile operator in Africa and is leveraging its knowledge of the continent to offer aggressively cheap fees for remittances to 12 African countries.
The group has 69-million MoMo users and 1.3-million active MoMo agents, says MTN South Africa CEO Charles Molapisi. He says MoMo is “an astounding product that is bringing the unbanked or underbanked into the digital economies with ease and simplicity”.
MTN customers in the countries it operates in will access the app without using their data, says Roper, while the mobile operator will charge 4% fees for remittances. This is about half the cost of other remittance services he cited that charge 8%-10%.
MTN is hoping to tap into the estimated $1.2bn sent out of South Africa in remittances each year. Nigeria receives an estimated $18.6bn, which MTN clearly wants to capture.
Given the nature of mobile transactions, says Roper, “the person on the other side will receive the money in real time”.
In the remittance industry, if you “solve for Nigeria in and South Africa out, typically you have captured the market”, he says. MTN wants to do that better and more transparently by using the MoMo app, which requires a so-called liveness selfie of the person opening the account.
“We are using technology to help make our customers’ lives a lot simpler and easier,” he says.
South Africa already has 22,000 agents, and Roper aims to have “nearly 800 foot soldiers” by the end of the year helping people set up the app. “You don’t have to leave home or employment, we will come to you.”
As much as this is to encourage app downloads, it is also necessary to help a generally older group use their smartphones. “We have citizens in this country who have never used an app before. How do we encourage people to learn tech and digital?”
With its expertise in mobile from voice to data and now to fintech, MTN thinks it knows a thing or two. Those 69-million MoMo users seem to agree.
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