According to Mxit founder and CEO Herman Heunis, the tie up will make it easier for Mxit users to buy the social networking service’s money credits, called Moola, by using the bank’s MiMoney payment solution.

“A large segment of our user base is entry-level and unbanked,” comments Heunis. “They do not have bank accounts, but they do have mobile phones, and with MiMoney they can purchase goods and services with their mobile phones without using hard cash. Mxit will start hosting various shop fronts on the Mxit platform, which will enable users to purchase items such as airtime, music and Mxit Moola.

“If you look at the prediction for Internet access via the mobile phone for Africa and the Middle East, some analysts expect an increase of 400%-plus within five years,” he says.

Mxit plans to expand the offering into 26 countries, many of these on the African continent. “The expansion into Africa is intended to grow the user base on the continent substantially. We invite mobile operators in the various African countries to collaborate with it in creating new revenue streams for all parties.”

How it works

When a MiMoney voucher is purchased through a self-banking channel, consumers will be asked to provide their cellphone numbers in the beneficiary reference field. Once that transaction has been completed, an 18-digit voucher number is delivered to the specified cellphone number.

When a MiMoney voucher is bought from a “real world” sales agent (Ster-Kinekor was the first sales agent to sell vouchers), the 18-digit number has to be SMSed to the number provided on the sales slip, which will activate the voucher. This can then be used at any online retailer/service (like Mxit) that indicates acceptance of this payment method.

The MiMoney client saves on transaction fees as the merchant carries this cost. The MiMoney vouchers are available in any denomination for amounts of up to R1 000 and the monthly limit is R10 000.

It is expected that the system will go live in April.

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“The development of this Money Transfer service is a joint venture between Standard Bank and MTN Banking, offering a safe and secure way for customers to send money home. The service will allow money to be sent directly to the recipient, removing the hassle and cost of locating a traditional ‘cash-out’ location such as a bank’s branch,” says Tim Lowry, MD of MTN SA.

“Convenience for our customers has been the motivating factor in developing this service, and we have identified the stores most frequented by our customers, for the implementation of this service. This has enabled MTN to provide the service in areas typically under-serviced by the banks.”

The person sending the money goes to a participating outlet with the cash and receives a code from the money transfer agent. He then sends the code via sms or a phone call to the recipient of this cash. The recipient then goes to his or her nearest participating outlet and produces the code in order to receive the allocated amount of money. This transaction is as simple as 1, 2, 3.

Carefully selected outlets such as the Kosi Bay Supatrade Spar, Langa Spar in Flagstaff, the Spargs outlets in Umtata, Ncogbo, Mount Frere and Idutywa, and Multisave Baragwaneth are included in this pilot. There are currently 14 outlets linked to the service, which is not restrictive to MTN customers.

MTN already has a significant non-urban footprint and its popular Community Payphone network could also provide a base from which to further enhance the reach for the Money Transfer customers.

“As with the success of the Community Payphone network, we see the Money Transfer service as possibly providing increased employment opportunities whilst ensuring that even the most rural community is able to gain access to basic financial services.

“Following technical testing of the base system for the past year, this pilot project is intended to assess the demand for such a service prior to a possible wider rollout in 2009. MTN is also actively seeking partners in the targeted distribution areas to come on board and assist in the rollout of this project, to ensure a broader accessibility to the service,” concludes Lowry.

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