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African telco group MTN has extended its mobile money partnership with Ericsson as part of its fintech-fuelled expansion plans.
January 9, 2024
The deal will see the Swedish kit maker provide via its Wallet Platform the scaffolding MTN needs to offer a range of advanced financial services – like banking and insurance – in addition to payments.
MTN has been using the Ericsson Wallet Platform for years to power its MTN Mobile Money (MoMo) app. Consumers can use it to send money, pay bills, buy airtime and so-on, while merchants and agents have separate MoMo apps to allow them to quickly and easily begin accepting payments.
MTN also offers a MoMo API platform that enables developers to integrate MoMo payments into their own apps, turning the mobile money service into more of an ecosystem.
At the end of 2022, MoMo was available in 17 countries, and boasted 69.1 million active users, 1.3 million agents, and 1.5 million merchants. Transaction value totalled $221.3 billion.
"Ericsson's partnership with MTN is a world-leading example of the ability of mobile financial services to financially empower people and business – from giving the unbanked their first opportunity to control their finances, making it easier for women to access financial services and promoting digital inclusion – to enabling more advanced users to access high-end services," said Michael Wallis-Brown, head of mobile financial services at Ericsson.
"At MTN, we are not just connecting people, we are unlocking a world of financial possibilities for every African," added Serigne Dioum, chief fintech officer at MTN. "MTN Mobile Money offers a spectrum of mobile financial services, encompassing money transfers, payments, savings, and loans for every consumer, actively driving financial inclusion and advancing economic empowerment across the continent."
MTN wants more though.
Fintech is one of five pillars in the telco's Ambition 2025 strategy, under which MTN is transforming into a platform business, turning its various service offerings into distinct business units. The other pillars are digital services, enterprise services, network-as-a-service (NaaS), and an API marketplace.
MTN's objectives for MoMo under this strategy are to grow to 100 million active users, 2 million agents, and 3 million merchants by 2025. In terms of annual transaction value, it has set a target of $750 billion.
That would make it bigger than mobile money pioneer M-Pesa, which currently has more than 56 million customers and annual transaction value of $364 billion.
The market is shaping up to be large enough to accommodate multiple providers at this scale.
According to forecasts published by Juniper Research last May, mobile money transaction value in emerging markets is expected to reach $2.09 trillion by 2027, up from $1.58 trillion in 2023.
The analyst firm says growth is being driven by the transition by the likes of MTN to payments-as-a-platform (PaaP). Powered by solutions like Ericsson Mobile Wallet that make APIs available to developers, PaaP is spurring the development of new mobile financial services without placing additional burden on operator.
Juniper Research reckons the emergence of mobile insurance and microloans is expected to drive mobile financial services uptake in emerging markets, with users projected to reach 411 million by 2027.
It looks as if MTN is well-positioned to capitalise on this explosive growth.
Nick is a freelancer who has covered the global telecoms industry for more than 15 years. Areas of expertise include operator strategies; M&As; and emerging technologies, among others. As a freelancer, Nick has contributed news and features for many well-known industry publications. Before that, he wrote daily news and regular features as deputy editor of Total Telecom. He has a first-class honours degree in journalism from the University of Westminster.
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