MTN, a leading telecommunications provider, has significantly expanded its Mobile Money (MoMo) fintech offering by adding 25 new wallet corridors across 10 African countries. This expansion brings the total remittance network on the continent to a staggering 200 million wallets across 24 countries.
The move is particularly advantageous for migrant communities in South Africa who regularly send money back to their home countries such as Mozambique, Malawi, and the Democratic Republic of Congo, emphasized Kagiso Mothibi, General Manager for fintech products and services at MTN South Africa.
The newly established corridors facilitate transfers between South Africa and countries including the DRC, Ethiopia, Gabon, Kenya, Madagascar, Mozambique, Malawi, Senegal, Sierra Leone, and Tanzania. However, currently, payments only flow in an outbound direction from South Africa. Mothibi indicated plans to introduce inbound remittance functionality by the end of 2024 to address the remaining 10% of transfers.
MTN has forged partnerships with key fintech platform operators such as Orange, Tigo, M-Pesa, and Airtel to facilitate wallet-to-wallet transactions, ensuring interoperability across different networks. Additionally, wallet-to-cash functionality is available to provide users with greater flexibility.
The exchange rate for remittance payments is determined largely by the market rate obtained by MTN’s partners from their banking institutions. The remittance service incurs a charge of 4% per transaction, with transfers being processed immediately upon initiation.
The remittance market in Africa has historically been underserved by the formal financial sector, compelling many migrant workers to resort to risky cash-based methods for sending money to their families. Beyond telecommunications giants like MTN and Vodacom, which operates M-Pesa, other players are venturing into this lucrative market.
In February, BankservAfrica, responsible for the PayShap system, introduced a similar offering called Transactions Cleared on an Immediate Basis (TCIB) to cater to remittance flows within the Southern African Development Community.
During the announcement of MTN Group’s financial results for the 2023 fiscal year, Sergine Dioum, Group Chief Fintech Officer, highlighted MTN’s collaboration with regional initiatives like TCIB, aiming to enhance MoMo’s interoperability and accessibility in East and West Africa.
Mothibi emphasized that by expanding services to new markets and corridors, MTN is not only facilitating cross-border support for families but also driving economic empowerment and fostering greater financial resilience within communities. This move underscores MTN’s commitment to advancing financial inclusion and facilitating seamless financial transactions across the African continent.