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Johannesburg - Phone network MTN South Africa [JSE:MTN] has moved to discontinue its mobile money offering, owing to what it says is a “lack of commercial viability”.
The move comes as Fin24 exclusively reported earlier this month that MTN SA had stopped signing up new mobile money customers as it studied the feasibility of the product.
READ: EXCLUSIVE - MTN SA halts new mobile money sign-ups
“The operating costs of providing a mobile money platform has become prohibitive,” said Larry Annetts, MTN’s chief consumer officer, in a statement.
“The decision by MTN SA to shelve its mobile money service does not signify a complete exit from financial services. MTN is still committed to remaining a significant player in the financial services space and we are exploring opportunities in financial services space and other adjacent sectors,” said Annetts.
MTN further said that it is working with its partners to ensure that customers are not “adversely affected” and that it plans on introducing new financial services in future.
Lower user numbers
In a statement in 2014, MTN and Pick n Pay previously said that 2 million customers were using the mobile money product.
However, earlier this month, Annetts said in a statement “there are approximately 140 000 customers that are currently on board”.
MTN’s feasibility review of its mobile money service came after Vodacom shut down its M-Pesa service earlier this year.
In March, Fin24 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.
When Vodacom launched M-Pesa in South Africa in 2010, it had a lofty target of reaching 10 million customers.
