MTN South Africa shutters mobile money service

Money Transfer

Telco says operating costs were prohibitively high; reaffirms commitment to financial services.

MTN South Africa this week closed down its mobile money service because it was no longer commercially viable.

The telco launched MTN Mobile Money in 2012 and attracted more than 2 million users.

However, in a statement on Thursday, MTN's chief consumer officer Larry Annetts said "the operating costs of providing a mobile money platform have become prohibitive."

That does not mean MTN South Africa is pulling back from financial services altogether though.

"MTN is still committed to remaining a significant player in the financial services space and we are exploring opportunities in [the] financial services space and other adjacent sectors," Annetts said.

The company said it plans to introduce "innovative and customised" financial services products "in the near future."

MTN becomes the second South African operator in a matter of months to withdraw a mobile money service.

Vodacom in May announced it was shutting down its M-Pesa service after struggling to attract a critical mass of users due to South Africa's strong banking sector.

Vodafone-owned Vodacom said at the time that its decision would not affect M-Pesa's continued presence in its remaining 10 markets.

Indeed, the service has proven successful in markets with low levels of financial inclusion. At the end of March, M-Pesa had 25.4 million active customers.

Source: Total Telecom