South Africa’s telco’s have been trying for some time to unpick the mobile banking lock, but they have not been able to repeat the successes they have had in countries such as Tanzania, Uganda and Kenya.
But MTN, working with Pick n Pay (a Tesco equivalent), may have found the key to
Mobile banking – South Africa unpicking the lock?
success domestically. This week, the mobile operator and the retailer unveiled a plan to offer consumers, especially those in lower-income groups, access to free banking.
And, when they say “free”, they mean it: MTN customers who take up the offer do not pay any service fees or transaction charges. If they want a Visa-branded debit card to shop at places other than Pick n Pay and sister chain Boxer, customers will have to pay a one-off fee of R29.
Customers can even transfer money without any third-party fees being levied and they do not have to maintain a minimum balance either.
Pick n Pay customers who sign up for the service do not even have to be on MTN, a fact which could prove key to securing a large user base – although the range of free options is more limited for those who have Vodacom, Cell C or Telkom Mobile SIM cards.
Pick n Pay and MTN sell a co-branded SIM card that gives users access to the full range of MTN’s prepaid tariff plans for voice and data.
Each time someone with one of these SIMs recharges at a Pick n Pay or Boxer store, they receive 10% of the recharge value as bonus airtime. They also receive double loyalty points through Pick n Pay’s Smart Shopper programme, as well as quarterly rewards of airtime and loyalty points for using the SIM.
Pick n Pay deputy CEO, Richard van Rensburg, says the retailer has given serious thought to launching a mobile virtual network operator along the lines of Virgin Mobile, but decided instead to work with MTN to launch the co-branded SIM card and drive mobile banking solutions to its clients.
Shoppers who want to buy goods from Boxer or Pick n Pay dial a special code on their phones. They are then sent a unique number, which they show to the cashier. Customers can also withdraw or deposit cash at the tills, buy prepaid electricity or pay for municipal services.
This seems to be the smartest approach to mobile money in South Africa so far. The question now is whether MTN and other mobile operators, working with retail partners, can succeed in getting the unbanked into the formal financial services system when the banks have failed so dismally.
Vodacom will announce its plans to relaunch M-Pesa soon. The mobile wallet has been a huge success in Kenya and Tanzania, but it has not taken off in South Africa. That could change with a bit of tweaking – and a real turf war could break out between South Africa’s banks on one side and the cellular providers on the other.
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