When it comes to mobile money, Africa is largely a success story. While this cannot yet be said for all countries - including SA - the local telecoms and banking industries are starting to invest a bit more time, mind and money in the evolution of banking services.
Shaibu Haruna, MTN Uganda GM for sales and distribution, yesterday addressed AfricaCom delegates on the power of mobile money as an enabler of financial transactions, saying it is gaining continental ground.
Taking Uganda as a case in point, he notes that over half of MTN's customers in the East African country (more than six million) make use of MTN Mobile Money, and generate over 25 million transactions each month.
Part of a panel discussing how mobile money services fit within mobile operators' strategies at the Cape Town annual event yesterday, Haruna said mobile money is evolving rapidly in the transaction sub-sects it offers customers - including money transfers, payments of goods and services, and international remittance.
Haruna warned, however, that approaching mobile money as "just another" value-added service (VAS) would be detrimental to the success of the service. "It is common practice for mobile network operators to approach mobile money deployments as another VAS, but are quick to realise mobile money is a far more demanding service that requires a completely new skill set, organisational design and route to market to make it meaningful."
He said the benefits of a mobile money service for operators include contribution to revenue, impact on churn and average revenue per user, and the opportunity to leverage the mobile money agent network. But "deliberate investment", he says, is required from mobile operators if they are to realise these benefits.
"Building a sustainable mobile money ecosystem requires sustained investment in the technology platform, agent network and consumer education. Key areas of investment include agent training, branding, trade incentive and support. The demands on above-the-line and below-the-line campaigns, using foot soldiers, have proven impactful, but could be costly, especially in the short-run."
He concluded that agent network design, speed of product innovation, and ease of use will remain key to market leadership when it comes to mobile money.
Local line-ups
It has long been confirmed by local industry players that mobile money in SA has battled to gain traction among the masses - despite about 30% of the nation's adults being unbanked.
Over the past few months, Vodacom has been working on revamping its mobile money service M-Pesa, which was launched with Nedbank in the last quarter of 2010 - but has since failed to snowball as it has in other African countries like Kenya and Tanzania.
Since launch - in the Kenyan, Tanzanian and Afghanistan markets - M-Pesa has gained more than 10 million customers. Vodacom and Nedbank initially estimated there were over 13 million "economically active" people in SA without a bank account - and Vodacom projected it would sign up 10 million users in the first three years. By May last year, however, the service was only being used by about 850 000 of the operator's 20 million-strong customer base.
In May, Vodacom CEO Shameel Joosub conceded M-Pesa on the local front had not lived up to expectations, but said he envisaged the service to account for about 15% of Vodacom's revenue as a group in the next three years.
At the time, he also said M-Pesa would be relaunched on a new IT platform that would interface directly into banks within the next few months. The company was also seeking to expand the distribution channel to add on more points of sale, he said.
This week, Joosub said a pilot of the new M-Pesa platform would be launched within the next few weeks, with the commercial launch set for early next year.
Meanwhile, second operator MTN recently stepped up its local marketing efforts for its offering, MTN Mobile Money. Two months ago, the operator held a media briefing outlining what it said was a significant milestone in mobile money.
MTN SA chief marketing officer Brian Gouldie said the service - launched a year ago now - had by September seen over one million accounts being opened, and had processed more than R1 billion in transactions.
At the time of launch, the yellow operator said it was "certain" that a mobile device would be integral in building a cashless society in the near future.
This morning, MTN announced it has added to its mobile money offering through a partnership it has forged with Visa. The operator says customers will soon be able to use their devices to pay via their MTN Mobile Money account in stores with Visa points of sale - as well as to make online payments at all Visa merchants and withdraw money from their account at any Visa ATM.
MTN Mobile Money customers in Ghana will be first to have access to the new solution, which will be launched in the country before the end of the year. MTN says the service will then be rolled out progressively across the rest of its footprint.
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