MTN South Africa, the country’s second largest mobile network has pulled the plug on new mobile money sign ups in a move that might likely see the firm end the service totally.
According to Fin24, the firm has around 140,000 users and is no longer signing up new mobile money customers and is now reviewing its mobile money service.
“MTN can confirm that the platform is not available for new customers. MTN is currently in discussion with all relevant stakeholders to explore the feasibility of continuing with this service,” chief consumer officer at MTN SA Larry Annetts said in a statement emailed to Fin24.
MTN is not the first company to discontinue its mobile money service to its customers. In June this year, South Africa’s Vodacom discontinued its M-Pesa product after showing a little prospect of growth in the country.
Speaking about the decision, Shameel Joosub, Vodacom Chief Executive Officer, said “Vodacom’s decision is based on the fact that the business sustainability of M-Pesa is predicated on achieving a critical mass of users. Based on our revised projections and high levels of financial inclusion in South Africa there is little prospect of the M-Pesa product achieving this in its current format in the mid-term.”
MTN’s closure of the service does not come by surprise. Unlike other markets in Africa, South Africa has high financial inclusion rates limiting the use of mobile money. In Kenya, M-PESA has over 23 million customers and over 100,000 M-PESA Agent outlets countrywide and is taking centre stage as the country’s biggest payments service for both online and in-store purchases. Like a digital wallet, the service allows users in Kenya to send or receive money, pay for bills and transact easily, safely and conveniently using their mobile phones. M-PESA continues to lead the world in mobile money transfer. It has revolutionised the way Kenyans do business leading to more financial services such as M-Shwari, a savings and loan service among others.
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