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SA e-wallets 'going strong' despite mobile money shutdowns

Johannesburg - Experts believe there is a demand in South Africa for electronic wallet solutions, despite the recent shutdown of two major mobile money services. 

According to the latest data from FNB eWallet Solutions, 4.2 million new eWallets were created over the last 12 months, a rate of about 350 000 new eWallets per month.  

The bank says it is also seeing a steady upsurge in total eWallet cash withdrawals, an indication that users are increasingly using the service as a means for remittance.  

READ: Why Vodacom M-Pesa has flopped in SA

FNB’s observation is consistent with the findings of the 2015 FinScope research, which showed that more people are choosing to remit via a bank. 

Sandi Madikiza, CEO of FNB eWallet Solutions, said that over the years they have seen the eWallet become part of the South African vocabulary, as many users see it as a convenient and cost effective way to send or receive money.

“This is one of the reasons we continue to grow the number of withdrawal points to enable broader financial inclusion through easy access,” Madikiza said.

MTN, Vodacom mobile money shutdown

But it hasn't all been plain sailing for South Africa's e-money market.

Earlier this month, MTN [JSE:MTN] killed its mobile money service, owing to what it says is a “lack of commercial viability”.

READ: MTN SA kills mobile money service

In a statement in 2014, MTN and Pick n Pay said that 2 million customers were using the mobile money product.

However, according to a recent statement about 140 000 customers are currently on board.

In May this year, Vodacom [JSE:VOD] shut down its mobile money transfer service M-Pesa.

Vodacom launched the service in 2010 and set a target of reaching 10 million local users.

However, the service only reached 76 000 active users, according to Vodacom’s 2015 integrated report.

Do you use eWallet services? Tell us by clicking here.

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