South African mobile instant messaging (IM) company MXit, in partnership with UCS and its subsidiary, wiWallet, will bring a mobile payment service to its 10 million-strong consumer base within the second quarter.
According to the company, the new service will not replace its existing micro-payment platform, MXit Moola, but rather complement the existing service with a mobile payment gateway and voucher system.
“MXit was one of the first mobile IMs, if not the first, in the world to create a virtual voucher economy for our users as early as 2005, purely based on premium-rated SMS; but due to operator costs, we were limited to selling small value items only, such as wallpapers, skinz and other virtual goods,” says Herman Heunis, founder and CEO of MXit.
The platform will enable users to purchase more costly items, such as airtime, electricity, music, games, as well as make in-store purchases in hospitality and the fast-moving consumer goods market.
Mobile banking has seen good traction in the local landscape, as it is estimated that only about 11 million of SA's 49 million people have access to a formal banking environment and have a bank account. However, there are an estimated 30 million prepaid cellphone accounts.
Heunis hopes to achieve the same success as Kenya's M-Pesa mobile payment system, which has 10 million subscribers.
M-Pesa has been introduced in other countries and most recently in SA; however, the local offering has seen a slow start.
Late last year, Vodacom reported only 21 000 M-Pesa subscribers, but the operator noted that the numbers were climbing on the back of a nationwide roadshow and increased distribution reach.
However, Heunis is confident that, based on the existing customer base, coupled with the company's intention to keep costs low and the transaction process simple, the offer will enjoy similar success to that of M-Pesa in Kenya.
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