MTN makes giant mobile money strides in the rest of Africa

In just four years, MTN has rapidly built a mobile money service that has become larger than its traditional telecommunications offering in the South African market.  

In August 2019, MTN ramped up the launch of a mobile money transfer service called MoMo (short for mobile money) in countries such as Nigeria, Uganda and Ghana, targeting consumers who don’t have access to formal banking services. The service allows consumers to store, send and receive money using their cellphones.  

MoMo mainly serves consumers in the rest of Africa and largely not in South Africa, which has more sophisticated banking services and whose population is mostly banked. This means that many consumers in South Africa have access to formal banking facilities.

In just four years, MoMo has garnered more active users than MTN has in its traditional South African operations, which mainly consist of voice and data services. For the six months to the end of June 2022, MoMo managed to grow the number of customers who actively use the service by 24% to 60.7 million. This is nearly double the number of customers that MTN has in South Africa, which reached 35.3 million during the same period.  

The level of growth in customer numbers at MTN’s South Africa operations (including its voice and mobile data services) didn’t come close to MoMo’s, with the former’s growing by 8.9% vs 24% by MoMo.

MoMo has become so popular that it generated a transaction volume of six billion over six months which was worth $116.3-billion.

MTN’s new mobile money business is becoming a serious component of revenue generation for the entire telecommunications group. MTN wants to use MoMo to push into the fintech (financial technology) arena, diversifying from its traditional voice business, which is in decline. The trend of decline is also occurring at other telecommunications companies.