Second operator MTN has reached a milestone the operator believes stands it in good stead for further growth in a sector that has largely failed to gain traction in SA, mobile money.
Nine months down the line from the launch of MTN's cellphone-based bank account service, the operator says it has opened over one million accounts, and processed more than R1 billion in transactions.
Operated by TYME (Take Your Money Everywhere) - a distribution channel of the Bank of Athens - Mobile Money went live on 22 November. The solution is SA's first mobile-only bank and allows customers to make payments, transfer funds to other users, buy prepaid services (such as airtime and electricity), pay for groceries and withdraw cash (at Pick 'n Pay and Boxer branches), via USSD.
Brian Gouldie, chief marketing officer of MTN SA, says the company believes mobile money will, in the coming months and years, "fundamentally change the face of financial services".
At the time of launch the yellow operator said: "MTN is certain that in the near future, a mobile device will be integral in building a society that carries no cash, but can transact through a mobile device."
Gouldie says the cellphone service ultimately empowers customers to enable future business models. "The reality is, in Africa, prepaid telecoms is the most dominant form of technology. The new world - the digital world - requires those same customers to be able to access digital content; and in order to do that, they need access to mobile finance. I suppose strategic insight really sits at the heart of this [product]."
Banking the unbanked
MTN says its Mobile Money account aims to bring low-cost banking to the unbanked in SA. "Applicable fees are directly related to customer transactions: cash deposits and withdrawals cost R4 regardless of the amount, while sending money transactions costs R1.
"Particular fees are waived for MTN customers, such as cash deposit and sending money fees. A maximum balance of R25 000 and a daily transaction limit of R1 000 are specified for the account."
Gouldie says a basic account is sufficient to meet the needs of a large proportion of the population, particularly the un-banked. "The fee structure makes it financially accessible for people who may not have been able to afford financial services previously."
Mobile Money is network agnostic, allowing customers on any mobile network to open an account. Airtime for any network can also be purchased through Mobile Money, for which MTN customers receive a 5% "cash reward" into their accounts, irrespective of the network for which the airtime was purchased.
Gouldie says, while airtime sales are still small, growth of 43% month on month has been ongoing since January.
TYME chief information officer Coenraad Jonker says, of the current Mobile Money base, 44% of customers have performed a transaction in the last 90 days. "[This represents] a significant advantage over the GSM Association's reported industry benchmark of 22%."
In an environment that has seen many other initiatives fail, Jonker says he believes the success Mobile Money has seen to date can be attributed to three main drivers: a user-centric design, simple registration process and the brand and footprint that MTN's partner stores Pick 'n Pay and Boxer have.
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