Mobile Money, a mobile banking initiative by MTN which uses Pick ‘n Pay and Boxer stores as branches, has reached a million customers and processed over R1-billion in its first nine months, MTN has announced.

Launched in November last year, Mobile Money is effectively a bank account that can use electronic funds transfers (EFTs) from the traditional banking system. Customers can sign up for the service using their cellphones, there are no monthly fees and no minimum balances. Money can be sent to anyone with a South African cellphone number.

Mobile Money is powered by MTN but its required banking partner is the South African Bank of Athens, through its distribution partner TYME which runs the service. Pick ‘n Pay and Boxer provide the stores for customers to deposit and withdraw cash. The only sign-up requirements are a South African ID number and to be over the age of 16.

Mobile Money is able to sign up new users and avoid the FICA requirements of proof of their physical address and identity because of a banking provision (Banks Act Guidance Note 6/2008) that exempts accounts with less than R25 000 deposited and a R1 000 daily transaction limit.

Transaction via mobile devices are a potential boom area for Africa which has a lack of traditional banking infrastructure. In east Africa, the M-Pesa cellphone payment system handles an estimated 40% of the Kenyan GDP and some $25-million a day is transacted through it.

Launched by Vodafone-subsidiary Safaricom, M-Pesa has failed to launch in South Africa via Vodafone’s other African network, Vodacom, but has seen some uptake in Tanzania where Vodacom has a significant presence.