MTN plans to launch a bank, leveraging MoMo's success, as SARB opens the payment system to fintechs.

MTN is planning to get a banking licence when the South African Reserve Bank (SARB) allows fintechs and other non-banking companies to access the national payments system, as reported by Business Times.

Currently, MTN offers limited banking-like services through its MoMo (Mobile Money) platform. This service allows users to make payments and transfer money using their phone numbers instead of traditional bank account numbers.

MoMo focuses on small businesses like spaza shops and low-income customers who often use cash. For now, MTN relies on African Bank as a partner since it doesn’t have its own banking licence.

Recently, TechCentral reported that SARB is working on new regulations to let fintechs directly access the core clearing and settlements system. Tim Masela, head of the SARB’s National Payments System department, explained:

MTN South Africa’s fintech officer, Kagiso Mothibi, confirmed that fintechs will soon be able to join the banking system under new rules. “When that is rolled out, we’ll definitely be looking to pursue our own licence,” he told Business Times.

SARB is working on frameworks to regulate fintechs and non-banking companies while balancing innovation and financial risk. Mothibi also highlighted that getting a banking licence would give MTN more control over its banking services.

MTN’s goal is to make MoMo a low-cost banking option for users. The platform has grown to 11 million registered users, with three million active customers.

Recent improvements to MoMo include launching business wallets and international money transfers in September 2023. In February 2024, MTN partnered with Mastercard to give MoMo users virtual and physical cards for payments worldwide.

Mastercard also invested $200 million in MTN Group Fintech, boosting its growth.These upgrades helped MTN’s fintech revenue grow by 59.1% in the first half of 2024 and by 61.8% in the third quarter compared to 2023.

MTN is not the only telecom company focusing on financial services. Vodacom is expanding its offerings with platforms like VodaPay and M-Pesa, Africa’s leading mobile money service.

The shift to financial services helps telecom companies reduce their reliance on traditional cellular revenue, which has slowed due to cheaper data, better network access, and growing competition.