MTN in aggressive MoMo push on home turf
MTN plans to use Mobile Money (MoMo) in SA as a conduit to demystify the fear of digital transactions, as the telco announces a new strategy to control the lion’s share of the market.
The telco, which has been seeking to reposition itself and push into new sources of revenue, last week set out an ambitious plan to embolden its fintech position in SA through MoMo.
MTN, which has in recent months recorded increased uptake in its fintech business across 21 other countries where it has footprint, has now set its sights on its home market, outlining its vision to capture the market in an interview with ITWeb.
Africa’s largest mobile operator recently unveiled a multimillion-rand alliance with International Finance Corporation (IFC), to expand the MoMo business in SA, targeting basic digital transactions to give people confidence to transact electronically.
“We want to start off with the lowest hanging fruit − those products that people pay in cash − getting them to be confident to do digital transactions. So we are looking at things such as airtime, buying electricity and paying for DSTV,” says Felix Kamenga, chief officer for Mobile Financial Services at MTN SA.
“We are starting off with what we call basic digital transactions and those are the ones that give people confidence to start doing more advanced services.”
With the backing of IFC and a R28 million war chest, MTN is now recruiting for its fintech unit, seeking to onboard 10 000 MoMo agents by the end of this year, who will market the telco’s products in communities.
Kamenga says there are still people in SA who are underbanked and are not enjoying the benefits of digital services, and MTN is hoping to bridge that gap.
“Financial inclusion has its limitations and we definitely see that there are limitations. You just have to look at what happens on month-end where you see people in queues at ATMs converting their digital money into cash. So what we have picked up and seen – which is supported by studies – is that the majority of South Africans still convert digital money into cash. The last statistic I saw in 2019 is that cash was still growing more than electronic transactions.”
Kamenga says MTN will also be able to leverage some lessons from its work elsewhere on the continent, especially in the areas of distribution and growing an ecosystem to drive transactions.
“MoMo is quite established as a brand outside SA; we are the biggest brand in Africa. It’s only natural we include our home market. We have already started the recruitment.”
MTN’s MoMo service has ballooned in its other markets. For the year ended December 2020, in Nigeria, MTN’s MoMo continued to accelerate, with a 269.2% increase in the number of registered agents to 395 000, and 4.7 million active subscribers from approximately 553 000 in 2019.
In SA, MoMo is closing in on a total of just over two million users since its relaunch in February.
Kamenga notes that MTN has identified fintech as a key growth pillar and, as such, is committed to funding MoMo over the next few years.
Explaining his vision to grow the business, he says MTN has a special focus on ensuring agents are empowered to understand the benefits of digital banking.
“The growth and development of 10 000 MoMo agent businesses across the country not only benefits local communities and economies, but has the ripple effect of many more unbanked and underbanked South Africans having an opportunity to manage their money digitally, wherever they are.
“In this programme, we hope to bring this to fruition by engaging with small and medium retail businesses with a particular focus on developing youth and women and underserviced areas.”
Plans to grow MoMo in SA come on the back of GSMA estimates that there are over 5.18 billion unique mobile subscribers across the globe. At the same time, the World Bank estimates that at least 1.7 billion people remain unbanked.