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MTN, Standard launch cellphone banking
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THE STRUGGLE to bank 14-million South Africans without bank accounts took a leap forward yesterday, as cellular operator MTN launched SA’s first cellphone bank, along with Standard Bank.
FinMark Trust, a low-income banking think-tank, last year found that 32% of the 14-million unbanked adults had cellphones and it is this market that “MTN Banking” has in its sights.
Standard Bank has 6-million customers, while 8,4-million people have an MTN cellphone.
Standard Bank retail head Peter Wharton-Hood said the venture was a major step forward because at no stage did a customer need to go into a bank.
Accounts are opened over a cellphone, and all transactions can be done outside the confines of a traditional bank.
“Banks are under pressure to make banking accessible to customers … and with this, you have a bank in your pocket,” he said.
But the Mzansi low-cost bank account could come under pressure, as MTN Banking could prove cheaper — while cellphones have greater reach than banks into rural areas.
MTN’s MobileMoney account charges R1 a balance inquiry, R3 a payment, and R5 a Standard Bank ATM withdrawal.
Mzansi’s costs are similar after a few free transactions, but there are hefty charges if people use the account too much.
MTN Banking CEO Jenny Hoffman — previously head of low-income bank Teba — said this was as significant a development as the creation of ATMs.
“It creates huge opportunities for the unbanked, and for countries in which there is little infrastructure,” she said.
Jeremy Leach, director of FinMark Trust, said this was “an excellent advance at the right time”.
“Cellphone companies are ideally positioned to effectively act as banks, and if the technology is used correctly … this has the potential to really expand the reach of banking into previously inaccessible areas,” he said.
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