JOHANNESBURG – Almost two million people now use MTN’s Mobile Money service, an innovation which enables free money transfers and payments, launched in 2012.
Announcing MTN’s partnership with Pick n Pay and supermarket Boxer Superstores on Wednesday, the telecommunications company CEO Zunaid Bulbulia describes the service as likely to “shake South Africa’s economy and banking sector”, adding that it will drive inclusive national growth.
MTN’s low-cost banking services are now offered at a combined total of 594 Pick n Pay and Boxer Superstores countrywide, to send and receive money, withdraw, and pay for goods and services at prescribed outlets by using a cellphone.
“It has the potential to transform the economy that we find ourselves in. The reason why we think it’s so profound is that we are on the cusp of launching a financial service that is simple, cost-effective and accessible,” Bulbulia explains.
How it works
-Users register for the service by dialling *120*668# to open an account and will be required to submit their ID number.
-Once registered, users create a password to access their virtual wallet and will be given an account number.
-Users will have to purchase a Mobile Money Visa card from any Pick n Pay or Boxer Superstore and activate it using their cellphones for ATM withdrawals and to swipe the card at retail outlets.
-To make deposits to the account, users access their virtual wallets using the dialling key and deposit money directly at the two retailer’s till point using a code (wiCode) which expires every 15 minutes. Users will have to provide the till cashier with the wiCode as a reference to the cash deposit.
-When making payments at the till, users log in to their account and use the wiCode, linked to an amount of money in the virtual wallet to make payments for goods.
– When sending money to another user, the dialling key is used and the sender must enter the recipient’s cellphone number to facilitate the transfer.
MTN says it has learned from South Africa’s counterparts in Ghana, Uganda and Ivory Coast where Mobile Money is sophisticated and part of business.
“This is the first time when there will be a bank card with no monthly fees, no fees for swiping and no need for a minimum monthly balance. This package is pretty compelling,” Bulbulia explains.
While the service is availble to all, there is a catch. The free bank charges are only available to MTN subscribers and non-subscribers will pay up to R9 for service fees per transactions.
MTN’s target, for now, is eight million unbanked South Africans.
Why Pick n Pay?
Bulbulia said it was Pick n Pay’s stores which are spread across the country, that has made MTN, favour the retail company. “We have learnt over time, with our money operations on the continent that distribution in this game is important (and) we have chosen the best distribution partner in SA,” Bulbulia adds.
Pick n Pay acquired Boxer Superstores in 2012, a decision which would see it tackle the low income groups.
The telecommunications company will also launch an MTN and Pick n Pay co-branded sim card, which will reward customers with 10% free airtime when they top-up at Pick n Pay, provided that they are registered for Mobile Money.
Loan, saving and insurance products in the pipeline
Coenraad Jonker, CEO of TYME, the software developer for the mobile innovation, says for now the service will focus on the day-to-day transactions.
“What we built here will make way for other things (offerings) to roll (out). What is exciting is that we can plug other products onto this mobile money accounts as we want to,” says Jonker.
The idea, which is in the pipeline he says, is to have multiple savings, loan and insurance products linked to the current mobile money account.
“From a customer behaviour point of view, it is important to do these things one at a time, there is a journey we take a customer on,” Jonker says.
There is also an opportunity for the service to be launched at other retail outlets.