What to Expect as MTN Plans to Separate its Mobile Money Business Unit, MoMo

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What to Expect as MTN Plans to Separate its Mobile Money Business

Telecoms giant, MTN has disclosed plans to launch its mobile money unit, MoMo as a standalone business. The group’s CEO, Ralph Mupita hinted that the telco’s fintech vertical is being undervalued in the market.

“If we were a bank, we would be a very big bank. We see a separation and carve out of our fintech business as something that we have to do”

Ralph Mupita, MTN Group CEO

“We need to reveal the value by structurally separating some of the key assets and platforms and make them standalone businesses over the medium term,” he added.

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Ralph Mupita, MTN Group CEO

In 2020, MTN processed $154 billion worth of transactions on its mobile money (MoMo) platform (excluding those completed in Nigeria and South Africa).

The MTN Momo service currently operates in 15 African countries including Uganda, Rwanda, Ghana and Nigeria as well as the Middle East. As of March 2020, the group had about 35.1 million active MoMo customers.

With MTN considering a separation of MoMo from its telecom business, we examine how things might play out.

Of Mobile Banking Services and Licences

MTN’s plan to launch MoMo as a completely separate business entity is perhaps aimed at acquiring greater freedom to expand its service offerings beyond just money transfer and cash withdrawals.

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In Nigeria for instance, MTN has so far been unable to secure a PSB licence, as the telco only possesses a Super Agent licence and cannot fully provide banking services to customers. This has prevented MoMo from offering payments and remittance services, issuing debit and prepaid cards, deploying ATMs, and other tech-enabled banking services.

The Central Bank of Nigeria has shown a reluctance to issue MTN a PSB licence due to the sheer market control that the operator could wield with MoMo still an integral part of its business entity.

Splitting MoMo from its telecom operations could place MTN in a better position to negotiate the acquisition of PSB and/or MFB licence in its Nigeria market to operate independently from banks (GTbank in this case) and provide direct banking services such as mobile lending and issuance of ATM cards as additional revenue streams.

Expansion into Key African Markets

Running MoMo autonomously means that MTN will not have to worry about mobile money constraints in its bid to play in the Ethiopian telecom space.

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This way, the operator can also concentrate on providing voice, data and other mobile network services without basing its venture on mobile money regulations.

Also, MTN as a telecom operator does not have a presence in Kenya but its MoMo service could launch in the market as a separate business. Even in MTN’s second-largest African market, South Africa, the MoMo service only launched in January 2020.

Is the MoMo Merchant App Coming to Nigeria?

Surprisingly, the MTN MoMo merchant app is currently not enabled for Nigeria and this is perhaps due to the constraining factors limiting mobile money growth and success in Nigeria such as insufficient infrastructure and low broadband penetration.

Screenshot Image
MTN MoMo Merchant app login interface

The app allows merchants manage all business payments including bills, salary and supplier transactions but is still unavailable for Nigerian SMEs.

As a separate business, the MoMo merchant app may go live in Nigeria to provide payments solution to retailers across the country.


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