MTN SA is targeting street traders, spaza shops and other township businesses with new Mobile Money offerings that will enable customers to withdraw cash from these stores.
The telecom company, whose Mobile Money (MoMo) app has about 9-million subscribers, wants 5-million active fintech customers by 2025.
This week, MTN unveiled new features that, among other things, enable businesses to receive payments directly from customers in real time, without transaction fees.
Customers will be able to withdraw cash at their local stores, earn rewards for every successful revenue-generating subscriber they refer, make payments at retail stores, buy electricity and pay for DStv.
At the same time, businesses can increase their customer base and expose themselves to MTN subscribers. With an estimated 150,000 spaza shops, the company sees huge opportunity for its fintech services.
It said cash still accounts for more than 50% of consumer transactions, with this being prevalent among low-income earners who have less access to digital channels.
“We live and breathe spaza shops,” said Bradwin Roper, MTN SA chief financial services officer, adding that banks have not served this market “well enough”.
About 80% of South Africans shop at spaza stores daily, with the industry valued at about R178bn.
MTN SA CEO Charles Molapisi said South Africa's informal market is increasing, with people trading on pavements everywhere using cash.
“It is not safe to carry ... cash. Every single place and point where there is cash, that is where we are going to participate. We would like to make sure that if someone wants to purchase anything on the pavement, all they take is a phone and scan a QR code to pay.”
MTN Mobile Money customers will also be able to withdraw cash from stores, including spaza shops and taverns, that have signed up for the company’s fintech services.
MTN's new MoMo features include cross-border money transfers to other MoMo users across 12 African countries, including Zambia, Ghana, Cameroon, Rwanda, Uganda, Ivory Coast, Liberia and Benin.
The company has also introduced point-of-sale or payment machines for businesses. Roper said the new devices will also allow users to make card payments at a lower service fee.
By the end of the year MTN will have 800 “foot soldiers” who will help customers sign up to MTN MoMo, said Roper. “You don't have to leave your home or the office, we will come to you.”
MTN said the new, broader reach of MoMo is in line with its mission to provide a low-cost alternative that enables individuals, including those without bank accounts, to share in the benefits of formal financial services.
“This is a proper wallet that we are building. It is secure and we will be adding more services,” said Molapisi.
MTN is committed to offering an alternative to expensive banking services, said Roper. “We are achieving this by introducing value-added platforms to our services that offer device users cheaper, more accessible options. People, particularly those in rural areas where traditional infrastructure is lacking, seek connectivity, simplicity, reliability and an increasing range of services from a single source.”
MTN group has ambitious plans to have 100-million fintech subscribers across the markets in which it operates by 2025, up from the current 69-million. The majority of customers are expected to come from Nigeria, where it is targeting 30- to 40-million Mobile Money users, up from 14.9-million.
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