MTN has extended its partnership Swedish network equipment giant Ericsson to bolster the technology underpinning its lucrative fintech platform.
The two companies said on Tuesday they had strengthened their partnership to “broaden the scope of financial inclusion from first-time users to high-end business applications, utilising MTN’s Mobile Money (MoMo) service on the Ericsson Wallet Platform”.
The Ericsson unit is a mobile payments platform used by numerous operators globally, supporting more than 400-million registered mobile wallets and processing over 2.8-billion transactions worth more than $40bn, every month through communications service providers and financial institutions.
Ericsson will offer advanced financial services to address the rapidly changing digital financial needs of individuals and businesses, in addition to ramping up MTN’s goal of capturing the unbanked market.
Africa’s largest mobile operator has 63-million monthly active users across 16 markets, while Vodacom and Safaricom have more than 52-million subscribers in seven countries.
MTN’s fintech offering includes mobile money, insurance, airtime lending and e-commerce, much like that of rival Vodacom.
Serigne Dioum, chief fintech officer at MTN, said the division “offers a spectrum of mobile financial services, encompassing money transfers, payments, savings, and loans for every consumer, actively driving financial inclusion, and advancing economic empowerment across the continent”.
“Our collaboration with Ericsson is a significant milestone in the execution of our Ambition 2025 — building the largest and most valuable platform business and create shared value for our customers in Africa,” Dioum added.
Vodacom recently partnered with Bidvest Bank to offer a new digital wallet for its VodaPay platform to revive its mobile payment efforts locally.
In mid-2023, Mastercard bought a minority stake in MTN’s $5.2bn fintech business in a nod to the growth and prominence of the mobile operator’s clout in financial services.
MTN launched its mobile money platform locally in 2012 before pulling the plug in 2016 due to a lack of commercial viability because three-quarters of the population had bank accounts. Vodacom shut its M-Pesa service in SA in the same year, citing similar reasons.
Having taken a second swing from the start of 2020, MTN now has a base of 9-million registered users. The unit’s services include in-store payments, prepaid services, mobile wallets, microloans, microinsurance, and a point-of-sale solution.
The group says its annual transaction value has almost tripled from $76bn in 2018 to $204bn in 2022. Transaction volumes increased more than threefold over the same period to 12.7-billion from 3.5-billion.
The group’s fintech business accounted for about R10bn of group earnings before interest, taxes, depreciation and amortisation in the first half of its 2023 financial year.
In September, the group entered Africa’s competitive remittance market, allowing for the movement of money in more than 10 countries.
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