MTN SA will expand its mobile money services by adding new products, but it is unlikely to apply for a financial services licence, like its competitor, Vodacom.
Banks and cellphone network providers are partnering to provide mobile money services as a value-added service. There is increasing convergence between cellphone and banking technology to provide seamless solutions for communication, shopping and banking needs.
"We are looking extensively at what future customers will want," says Karel Pienaar, the MD of MTN SA.
"But we are a total believer that a licence is not a hindrance. We can use our existing partnership with banks to provide the services that we want to provide our customers," he said.
"There are still opportunities in SA, and our initial focus on mobile payment service will focus on the unbanked," he said. MTN has 7-million mobile money customers in 13 countries.
Vodacom was granted a short-and long-term insurance licence last year, allowing it to sell funeral cover, insurance for handsets, laptops and tablets.
Deloitte said in June that the use of debit and credit cards would reduce over time as more consumers used cellphones to make payments, using new technology that eliminated the need to swipe a card.
MTN Group CEO Sifiso Dabengwa recently said mobile money was a key part of the business in which the group wanted to "significantly" improve. MTN is investigating which innovative services to add that will attract customers, especially the unbanked in SA.
In a recent survey, KPMG said consumers in countries where vast numbers were unbanked had adopted the payments as a quick, reliable way to transfer money.
The most popular transaction in cellphone banking remained airtime purchases, with 74% of customers using it for this purpose, and only 15% paying accounts with their phones, according to a study released recently by World Wide Worx. Phone-based purchases of physical products that are delivered to the buyer are made by only 4% of urban cellphone users.
"A big opportunity still lies dormant in mobile commerce. But virtual business will always need infrastructure, and that remains the barrier to cellphone purchases of physical product," said Arthur Goldstuck, MD of World Wide Worx.
"The popularity of money and airtime transfers via cellphone banking is one of the clues to why stand-alone mobile money transfer services have not taken off in SA. There simply is no desperate need for them, " he said.
The study also reveals that the growing sophistication of cellphones is resulting in new options for customers who use cellphone banking services.