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MTN Banking - South Africa’s first mobile bank runs on Fundamo
In August 2005, Standard Bank formed a 50/50 joint venture with MTN to launch a banking service that allows customers to open and access accounts using their mobile hand sets. The free service enables MTN’s 17 million mobile phone subscribers, many of whom are under-banked or unbanked, to activate a MobileMoney transactional account using their mobile phones.
MTN Banking and the MobileMoney product offers one of the most cost-efficient banking solutions yet available in Africa. It includes a free SMS alert service and also enables person-to-person payments, fund transfers and bill payments. Customers receive a MobileMoney CashCard which can be used at Standard Bank branches and ATMs. These cards can also be upgraded to MasterCard credit cards. All new MTN SIM cards have MobileMoney pre-loaded during production, and CashCards are included in all ‘pay as you go’ and contract starter packs.
Unlike ‘mobile banking’ services offered by existing banks, MTN Banking was built from the ground up and exists as an independent financial institution. It is against this backdrop that the company selected a solution which allowed it to leverage its existing technology, but at the same time provide it with a secure, robust, and scalable architecture which would be able to process the volumes of transactions handled by a large bank.
“MTN had a unique challenge when it decided to move into the banking services industry, it needed to build a bank from the ground up,” says Hannes Van Rensburg, CEO of Fundamo.
“While there is a partnership with Standard Bank - where MTN works under Standard Bank’s banking license, and leverages its ATMs and bricks and mortar, the bank itself operates as an entirely separate entity. Unlike mobile banking which is merely a channel of an existing bank, a mobile bank offers an entirely new set of services through the mobile phone,” explains van Rensburg.
With Fundamo technology as the core component, MTN Banking is able to leverage the company’s experience of having already rolled out five mobile banks across Africa, the oldest of which is now 3 years old. With this experience in the mobile arena users are able to benefit from three layers of security, namely something you have (your SIM in your mobile phone), something you know (your pin), and something which is you (your voice print), all of which reduce the possibility of fraud and theft as your banking is tied to your sim, PIN and voice.
Fundamo has been building mobile banks and banking solutions for its customers for more than five years, and currently provides mobile transactional solutions which enable easy mobile transacting, empowering the user to securely conduct mobile payments, at their own convenience.
“With a mobile bank you can do everything you are used to doing at a normal bank and more. You can open and activate an account from your phone, transfer funds, get your salary paid into it, and execute all debit orders through it. The reality is that this is no gimmick – it is a real bank,” adds Van Rensburg.
Through its relationships with Standard Bank and MasterCard, MTN Banking also offers credit cards and a cash card. Making use of the Standard Bank ‘bricks and mortar’ infrastructure gives users reticent of purely using their mobile phone, the opportunity to use traditional banking infrastructure as well as the mobile features.
Fundamo worked closely with the technical team from Standard Bank throughout the development of the MTN Banking system. The Fundamo technology had to ensure that no matter what additional services were added to the bank and no matter how many transactions went through the system, it would be up 100% of the time.
According to Van Rensburg, Fundamo has also integrated card functionality much tighter into the process, as an example an ATM card, if misplaced, can be switched off or deactivated using your phone, and then switched on or reactivated when found. This minimises the necessity to have to cancel it through a call centre and then having it replaced in its entirety.
“Mobile Banks change the economies of banking, as it offers the same services as traditional banking, but at potentially much better rates and better customer value,” states Van Rensburg.
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