Verified reports indicate that the biggest telecom company in Africa has shut down its South African unit’s Mobile Money services. This comes after it previously ceased registering new signups for the service and further went on to say that the services will remain operational while they do a feasibility study, amidst a slow uptake by South Africans where it managed to garner only 2 million customers (revised figures accurately put the figure at 140,000) out of its 28 million subscriber base, in a period of 4 years.
The lack of commercial viability by Mobile Money has forced MTN to shutter the service in South Africa. “The operating costs of providing a mobile money platform has become prohibitive,” said Larry Annetts, MTN’s chief consumer officer, in a statement.
“The decision by MTN SA to shelve its mobile money service does not signify a complete exit from financial services. MTN is still committed to remaining a significant player in the financial services space and we are exploring opportunities in financial services space and other adjacent sectors,” said Annetts.
In a similar manner, Vodacom closed its M-Pesa service in May this year given its user numbers fell short of its expectations, registering 76,000 users below the anticipated 10 million.
It should noted that most South Africans are formally banked and so Mobile Money faced off competition from traditional banks since its inception in the country. However this isn’t the case here in East Africa where financial inclusion is still a mess, and majority of the population remains unbanked and so the success stories of Safaricom’s M-Pesa with over 13 million users.