MTN SA has pulled the plug on its mobile money service because of the lack of commercial viability in a country where about three-quarters of the population had bank accounts.

This comes four months after Vodacom closed a similar product called M-Pesa in SA, which had been meant to duplicate the uptake of Kenya’s similarly named, but more successful mobile money transfer service.

Mobile money services that enable customers to transfer funds using their phones are popular in other parts of Africa, particularly where people have limited access to traditional bank accounts.

“The operating cost of providing a mobile money platform has become prohibitive,” said MTN SA chief consumer officer Larry Annetts. However, he said the company’s decision to shelve its mobile money service did not signify a complete exit from financial services.

MTN said its decision did not mean a complete exit from financial services. “MTN is still committed to remaining a significant player in the financial services space, and we are exploring opportunities in financial services space and other adjacent sectors.”

“MTN will be introducing innovative and customised financial services products in the near future, as it strives to lead the delivery of a bold new digital world to its customers,” said Annetts.

MTN SA launched its mobile money platform in 2012, and partnered with Pick n Pay and Boxer to offer its money remittance platform. It said the platform attracted over 2-million registered customers.

Mobile money services such as M-Pesa and MTN Mobile Money have failed in SA partly because the local banking sector is more developed than it is elsewhere on the continent.

•Source: Business Day SA/Reuters. Photo shows MTN SA chief consumer officer Larry Annetts.

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