This year is proving to be quite the stumbling block for mobile money solutions, or at least it seems that way for solutions that involve network providers.
MTN has announced that it will be decommissioning its Mobile Money platform citing a “lack of commercial viability”.
The platform was launched in 2012 and saw numerous updates and improvements through its lifespan. Among the improvements was a partnership with Pick ‘n Pay and Boxer which would allow customers to access funds through the store.
“The operating costs of providing a mobile money platform has become prohibitive,” MTN chief consumer officer, Larry Annetts said in a statement. “The decision by MTN SA to shelve its mobile money service does not signify a complete exit from financial services.”
Arnetts went onto say that MTN is looking at opportunities to stay in the financial technology market by looking at the financial, and other, related sectors. These services will be announced “in the near future” according to MTN.
The operator went on to say that two million users made use of the Mobile Money service.
Are all mobile money platforms doomed?
“Vodacom’s decision is based on the fact that the business sustainability of M-Pesa is predicated on achieving a critical mass of users. Based on our revised projections and high levels of financial inclusion in South Africa there is little prospect of the M-Pesa product achieving this in its current format in the mid-term,” said Vodacom chief executive officer, Shameel Joosub said at the time.
Vodacom had set a target of reaching 10 million people with the M-Pesa service.
But its not all doom, some services are flourishing.
Staying local, FNB’s eWallet service is doing well. In the same month that Vodacom announced the closing of M-Pesa, FNB reported that as much as R1.2 billion was being transferred through the mobile wallet each month.
More recently, this week in fact, Mastercard Africa partnered with iKhokha to expand the mobile cashless payment systems in townships.