MTN shuts down mobile money services in South Africa

On the September 15, MTN South Africa announced that it was decommissioning the product “due to a lack of commercial viability.” In May 2016, Vodacom announced that it had to shut down M-Pesa, the continent’s most successful and pioneering mobile money service. MTN representatives said that the operating costs of providing a mobile money platform have become prohibitive, but the decision to close its mobile money service does not signify a complete exit from financial services in Africa.

According to the company’s interim results, MTN’s Mobile Money subscribers grew by 23.3% to seven million in 2015 and the MTN Group has allotted more funds to marketing the product in countries like Cameroon and the Ivory Coast.

The telecoms company’s misfortunes began after a run-in with Nigeria’s regulators that led to a USD 1.7 billion fine over unregistered SIM cards, according to Quartz Africa.

At the beginning of September 2016, the MTN Group partnered with financial services company MMI Holdings, which operates in 17 countries, 13 of which are in Africa and announced the launch of a micro insurance product called aYo. The investment and insurance company will work with the telecom company to provide more “accessible insurance” in African countries with low insurance penetration. The move will allow both companies to compete in the mobile money services, a joint statement said.