Mobile Money to Bank: MTN Targets Banking Licence
Plans to Expand Financial Services with MoMo Platform
MTN is preparing to acquire a banking licence once the South African Reserve Bank (SARB) opens its national payments system to non-banking entities.
Currently operating MTN Mobile Money (MoMo), a limited transactional banking service, the mobile network operator sees an opportunity to become a more comprehensive financial service provider. MoMo has already grown to 11 million registered users, with approximately three million active customers.
Kagiso Mothibi, MTN South Africa’s chief fintech officer, confirmed the company’s intention to pursue a banking licence when regulatory frameworks are established. The SARB is developing new guidelines to allow fintechs and non-banking entities direct access to the core clearing and settlements system.
The mobile money service primarily targets small businesses and low-income consumers, offering payments and money transfers using phone numbers instead of traditional bank account details. Recent enhancements have boosted its appeal, including the launch of a business wallet, international remittances, and a partnership with Mastercard that provides virtual and physical payment cards.
These moves have yielded impressive financial results, with MTN’s fintech service revenue increasing 59.1% year-on-year in the first half of 2024 and jumping 61.8% in the third quarter compared to 2023.
The potential banking licence has become a broader trend among telecom companies diversifying beyond traditional cellular services, which have experienced slowing growth due to increased competition and infrastructure expansion.
SARB’s National Payments System department head Tim Masela emphasized the importance of adapting to changing financial technologies, stating, “We believe that we should move with the times and open up the system for the entry of non-banks.”
This development positions MTN to potentially transform its MoMo service from a mobile money platform to a full-fledged banking alternative, leveraging its extensive mobile network and growing financial service expertise.
