MTN versus Vodacom – Who is the Biggest Provider of Mobile Money in Africa?

Vodacom’s mobile money service is closing in on rival MTN

The battle for control of the bank accounts of African consumers through mobile money – essentially the use of mobile phones to access financial services – is about to get competitive.

The mobile money industry has now reached a major milestone: more than half a billion mobile money accounts were registered as of the end of 2016, with more than 170 million active accounts around the globe, according to GSMA.

The association said more than 40% of the adult population in Kenya, Tanzania, Zimbabwe, Ghana, Uganda, Gabon, Paraguay, and Namibia are using the mobile money on an active basis (90-day). This is an increase from just two countries in 2015 (Kenya & Tanzania).

Vodacom, the Vodafone-owned mobile phone operator, is about to narrow the gap with bigger rival MTN when it comes to delivering mobile money services across Africa.

This is reliant upon Vodacom getting all the necessary regulatory approvals to buy Kenya’s mobile phone operator, Safaricom, which has 19 million customers using M-PESA – mobile money services.

Kenya is the epicentre of the mobile money revolution.

The South African-based Telco has already received a nod from its minority shareholders to go-ahead and buy 35% stake in Safaricom for R35 billion.

This acquisition will boost Vodacom’s M-PESA customers to more than 32 million from its current 13.3 million across the continent, making it a top contender to challenge MTN’s dominance in providing mobile money services.

Vodacom launches m-pesa bank card
Vodacom launches m-pesa bank card (Photo Credit:

During the first quarter to end-June 2017, on average, R22 billion was processed monthly through the M-PESA system of Vodacom.

In Tanzania, 1 million customers are using Vodacom successful M-Pawa savings and loans product, developed in partnership with the Commercial Bank of Africa.

The South African-based company also operates in Mozambique, Tanzania, and Lesotho.

Media reports suggest that the Vodafone-owned firm may be keen to enter the lucrative mobile market of Nigeria, which is MTN’s biggest market and if successful could help it to grow its mobile money services. For more read: Vodacom May be Moving to Buy Nigeria’s 9Mobile

Africa’s largest mobile phone operator MTN has more than 41 million mobile money customers after the company recorded an 18.4% rise in the year to end-December 2016. This figure is set to change when MTN publishes its interims on the 3rd of August.

The growth was boosted by strong performance from MTN Ghana and Benin.

MTN generates about R2.8 billion in revenues in mobile money.

The Telco continues to focus on advanced financial services such as remittances (and has established 28 corridors), micro-lending and savings offerings.

In 2016, MTN introduced MoKash, an extension to the MTN Mobile Money wallet, in Uganda and Zambia, where there are over 1,5 million registered customers.

The loans are financed by its lending partner, the Commercial Bank of Africa, and the role of MTN is to market, originate and disburse the loans and collect the loan repayments using MTN Mobile Money.

 MTN Mobile Money
What is MTN Mobile Money? (Photo Credit: Graphic Online)

After launching in Uganda in August 2016, over 140 000 loans were disbursed in the month of December 2016.

“We are planning further pilots in Rwanda, Ivory Coast, and Ghana. At year end, we had approximately 74 000 active MTN Mobile Money financial services agents in Uganda,” MTN said during the presentation of its financial results.

Monthly airtime sales through the MTN wallet peaked in December 2016, demonstrating a lower cost distribution channel for core products.

The Telco’s Ayo, its joint venture with MMI Holdings Limited, soft launched two mobile micro-lending products in Uganda in 2016.

Despite being rivals, MTN and Vodacom are collaborating in providing mobile money services

In 2015, MTN Mobile Money entered into an agreement with M-PESA in East Africa to allow customers to transfer money between the two companies.

MTN has been promoting interoperability (the ability of customers of different mobile services to transact with others) which has already been a success for it in West Africa.

The agreement between Safaricom and MTN Mobile Money covers Kenya, Tanzania, Democratic Republic of Congo, Mozambique, Uganda, Rwanda, and Zambia.

“Together, we aim to build a scalable model that will accelerate remittance roll-out across the continent,” Serigne Dioum, MTN Group head of Mobile Financial Services, said at the time of signing the agreement.

Mobile money is strengthening the banking industry

The rise of mobile money has generated important gains in financial inclusion. By 2011, registered mobile money accounts grew to 86.8 million, with more than a quarter of them active, according to GSMA’s latest report.

The State of the Industry on Mobile Money 2016 states that between 2011 and 2013, the net number of total mobile money services nearly doubled, from 116 services in 60 countries to 230 services in 82 countries (see Figure 1 below).

When the Global Findex survey was updated in 2014, it showed the number of unbanked people globally had dropped from 2.5 billion to two billion in just five years.

Much of the gain in low-income countries has been attributed to the spread of mobile money.

The biggest impact was felt in Sub-Saharan Africa, where 12 per cent of adults in the region had a mobile money account.

The GSMA’s report added that in 2015, mobile money accounts surpassed bank accounts in the region (see Figure 2 below).

By 2016, there were 277 million registered accounts in Sub-Saharan Africa, of which more than 100 million were active.

“In this context, mobile money has emerged as one of the primary tools for reaching the underserved,” said GSMA in the report.

“To put the size of the industry into context, the total number of registered mobile money accounts would today be the third largest country in the world, behind China and India.”


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