South Africa’s MTN has debuted a mobile money service in partnership with local retailer Pick n Pay, with observers comparing the launch to runaway success M-Pesa in Kenya.
The service, which is actually called Mobile Money, enables users to send and receive funds, deposit and withdraw money, make payments, and buy mobile airtime and electricity.
By “make payments” the two companies mean subscribers can make point-of-sale purchases but only at branches of Pick n Pay or Boxer, another retailer.
Subscribers can also pay in funds to their accounts at the same two retailers. Their account cannot hold more than Rs 25,000 (US$2,795) and the service has a daily limit on transactions of Rs1,000.
Observers have noted similarities with M-Pesa which has actuall launched in South Africa via a partnership between Vodacom, a MTN rival, and Nedbank, a local bank. But so far M-Pesa has had a disappointing take-up in the country.
The banking element of the service is provided by a company called Tyme Capital. Tyme stands for “Take Your own Money Everywhere”. According to Tyme Capital’s website, it is a distributor for the South African Bank of Athens, which is providing its banking licence to the venture.
To make a point-of-sale transaction, users dial the service's number from their handset, and then enter their PIN before choosing the “pay at till” option. They then choose an option to have a one-off, seven digit code sent to them. This code, which can only be used once, authenticates the transaction with the cashier. It is valid for only 15 minutes. The subscriber can then take their goods. They receive an SMS in confirmation.
Notification of any transactions is made to subscribers via SMS although the actual funds are moved via USSD.