About 20 000 people have activated MTN Banking accounts since the cellphone bank began operating six months ago, says CEO Jenny Hoffmann.
"We don`t think that`s bad, given this is a new product," she comments. "It hasn`t been taking off like a rocket, but the curve is getting steeper every month."
She says it is still too early to begin analysing dormancy rates as the product is still very young.
"At the end of the first year we`ll have a look at that and define accounts that haven`t been used in three months as being dormant."
MTN Banking, a venture between Standard Bank and the cellular network operator, was unveiled at a media function in August last year.
The goal was to give Standard Bank access to MTN`s subscriber base and offer MTN an opportunity to grow its subscriber base and revenue.
MTN Banking`s first product is the MobileMoney transactional account, a SIM card-based bank account that allows for transactions such as person-to-person cash transfers, account payments and SMS notification - all via a cellphone.
The cellphone communicates with the network via unstructured supplementary service data (USSD), a communication technology that sends text between a cellphone and a program in the network.
"We also need to look at additional products like savings, credit and insurance," she says, adding that it is important to build a range of products to attract customers.
Branding
Hoffmann says one of the main differences between MTN Banking and other cellphone banking products, with the exception of Wizzit`s offering, is other cellphone banking products offer another channel into an existing account.
"We will open a bank account for you within minutes," she says.
The bank has said in the past that as it is not just another channel into an account, there are no hidden costs, such as fees for other products being used to subsidise it.
Hoffmann says MTN Banking has steered away from branding itself as a bank for the poor.
"We see value in targeting the poor, but people don`t like being patronised and feeling they are being offered a second-rate product because they`re poor," she adds.
"That is why we have targeted our branding at the upper-end as a secondary account and then tell low-income earners that this is also for you."
Hoffmann says MTN Banking has no regrets about choosing its current platform over more sophisticated platforms such as wireless application protocol (WAP), which some banks are using, as not everyone has WAP capability.
"The thing about WAP banking is you need a very smart telephone to do it. I don`t see that we need to go there for at least a few years."
MTN Banking began a survey last week to gather some information about its client base. Although not much information is at hand yet, Hoffman says indications are many small businesses are using the product, as well as people selling airtime.
"We know 75% of the people are prepaid at the moment," she adds.
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