MTN. (Duncan Alfreds, Fin24)
Johannesburg - South Africa’s second largest mobile network by subscribers, MTN SA [JSE:MTN], 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 (CBA) - helped install MTN’s mobile money solution.
In 2014, MTN SA further 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 at MTN SA Larry Annetts said in a statement emailed to Fin24.
“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 2 million customers were previously using the mobile money product.
SA’s mobile money curse?
MTN’s feasibility review of its mobile money service comes after Vodacom shut down its M-Pesa service earlier this year.
In March, Fin24 exclusively reported that Vodacom was reviewing its M-Pesa product. Vodacom then moved to shut down M-Pesa in May after the service only managed to notch up 76 000 users.
READ: Why Vodacom M-Pesa has flopped in SA
When Vodacom launched M-Pesa in South Africa in 2010, it had a lofty target of reaching 10 million customers.
Mobile money, though, has thrived in relatively unbanked African markets such as Kenya, where network Safaricom has over 11 million 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 36.5 million across 15 countries.
Revenue from mobile money services for the MTN Group across Africa also increased 40.8% to R1.29bn when compared to June 2015, according to the company’s latest interim results.
MTN is South Africa's second biggest mobile network with around 28 million subscribers.
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