The closure of MTN’s mobile money services in South African comes as a contrast to other markets in the region, where such services are on the up.
MTN follows Vodacom, which discontinued its M-Pesa service in SA in May this year. But both groups can point to flourishing take up elsewhere in their African footprints.
Compared to many countries in the region, South Africa has relatively high penetration of traditional banking services, which can hold back mobile money subscriptions.
MTN, which launched the service in 2012, stopped signing up new customers two weeks ago and has now confirmed the demise.
“Following much deliberation, MTN South Africa has taken a decision to decommission its Mobile Money offering due to lack of commercial viability,” the company said in a statement, reported by Techcentral.
The decision does not impact those money services it offers outside its domestic market, it added.
The South African service succeeded in attracting more than 2 million registered users, but chief consumer office Larry Annetts said operating costs had become “prohibitive”. It did not spell out which costs in particular, but clearly they made the business model unworkable.
However, the decision does not represent a complete exit from financial services for MTN in South Africa, said Annetts. The operator will still explore opportunities in the market, and in adjacent sectors, he said.