Mobile money transfer services such as M-Pesa have yet to take off significantly in SA, although the offerings have great potential, says prepaid services company Blue Label.
Vodacom and Nedbank unveiled M-Pesa in SA in September 2010. The mobile operator says in its latest annual report that take-up of the service has been disappointing, as there were less than 100 000 customers registered at the end of March.
There are several mobile money solutions in SA, as each of the big four banks offer at least one type of mobile wallet.
Blue Label joint CEO Brett Levy says mobile money will “be bigger then telecoms” when it eventually takes off. However, the local regulatory environment is holding back growth.
M-Pesa grew well in Kenya, because the banking environment is not regulated, says Levy. However, local banks have several laws to contend with, including the Financial Intelligence Centre Act (FICA), which requires people to provide proof of residence and identity in order to have a bank account.
Positive future
Levy says mobile money transfers in SA will meet and beat Kenya's levels once it takes off, which he expects to start happening in about the next two to three years.
Currently, it takes a merchant 25 days to sign up to vend M-Pesa, says Levy. He explains that this is due to the amount of paperwork involved.
However, Blue Label is working on digitising the paperwork, which will cut down on the amount of time it takes for merchants to be registered, says Levy.
While people are signing up to use the service, there are not enough outlets offering M-Pesa, which is hindering growth, Levy explains. He says about 300 outlets are registered and this number is expected to grow to 40 000.
Levy says the day the service gains traction, it will “skyrocket”. In the next three to five years, mobile money transfers will become a big service, and will not be limited to rural areas, he adds.
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