South Africa’s second-largest mobile network operator, MTN, is setting its sights on becoming a full-fledged financial services provider.
This comes as the South African Reserve Bank (SARB) considers allowing non-banking entities to access the national payments system directly.
MTN’s MoMo platform, already a popular tool for mobile payments and money transfers, has grown into a major player in the fintech space. With 11 million registered users—three million of whom are active—the service targets small businesses, informal traders, and low-income consumers.
Currently, MTN relies on African Bank as a partner to provide financial services through MoMo. But SARB is working on frameworks to allow non-bank fintechs to access the national payments system directly. Tim Masela, head of the SARB National Payments System department, said this move reflects the need for a modern financial system that embraces non-bank innovation.
MTN South Africa’s chief fintech officer, Kagiso Mothibi, confirmed their interest in pursuing a banking license. He emphasised that bypassing a traditional banking partner would give MTN greater control over its services, helping make MoMo a true low-cost alternative to traditional banking.
MoMo has seen significant upgrades, including the introduction of business wallets, international remittances, and a partnership with Mastercard to issue virtual and physical payment cards. These innovations have driven remarkable growth in MTN’s fintech revenues, with a 61.8% year-on-year increase in Q3 2024 alone.
While MTN’s primary competitor, Vodacom, is also expanding its financial services through platforms like VodaPay and M-Pesa, the telecom giants are increasingly diversifying their portfolios. This shift comes as revenue growth from traditional cellular services slows amid market saturation and falling data prices.
Withthe SARB paving the way for fintechs to reshape South Africa’s financial landscape, MTN’s ambitions to secure a banking license could mark a new era for financial inclusion and innovation in the country.
