MTN MOBILE BANKING DISAPPOINTS
MTN Banking, the joint venture between MTN and Standard Bank, which hoped to put a bank branch into everyone’s pocket, has not been the success its owners had hoped.
Faced with some operational hiccoughs, the number of active subscribers, (currently about 20,000) is somewhat lower than was expected, but MTN Banking CEO Jenny Hoffman, assured Moneyweb plans are being put in place to rectify the situation.
“We have actually had a fantastic response from people. So far about 350 000 people have tried to download the product, the problem has been getting it on to the phone,” she reckons. Hoffman says there have been two main stumbling blocks to the installation of the product on to cellphones.
The first is that many of the phones people were using had SIM cards that were too old to take the application. In such a situation, Hoffman suggests, people upgrade their SIM card, which, if one wants to keep one’s number, is quite expensive.
The second problem is that ID numbers of potential clients must be validated to comply with Financial Intelligence Centre Act (FICA) regulations. Therefore if the client does not have a credit record he/ she has to go into a bank or MTN branch to validate his/her ID and open the account.
Both these problems go against the unique selling proposition of the business, this, says Hoffman, is being looked at operationally by all three parties.
Over and above the less than perfect subscriber numbers, the two JV partners are being sued for R500m by former head of failed private bank, Regal Treasury, Jeff Levenstein and Byron Stewart.
They are suing the two companies for allegedly stealing their design for a mobile banking product.
Levenstein could not be reached for comment, and his lawyer Willem Heath had no comment about the state of the case.
Despite these problems Hoffman remains upbeat about the future of the product, saying that once the business has been “operationalised in the way it was envisioned” it will do well.
This view is supported by Hannes van Rensberg, CEO of Fundamo, the mobile payments firm that provides MTN Business with its software.
“I am pretty convinced that mobile banks and new generation banking will have a major impact on the way the world does its banking in the next ten years.