FNB eyes prepaid solution for SADC

By Siyabonga Africa, ITWeb junior journalist

Johannesburg, 11 Feb 2009

First National Bank (FNB) plans to expand its cross-border prepaid airtime solution to the greater Southern African Development Community (SADC) region.

The solution, which is already live in Namibia, will allow families in SA to buy airtime for people living in other countries where the service operates.

“We're looking at addressing the primary remittance corridors in the SADC countries,” says FNB mobile and transact solutions head of expansion and special projects Yolande van Wyk.

The bank is already leveraging its base of four million registered customers to use interactive financial services on their cellphones. Yet, Van Wyk believes it can reach far larger numbers by providing these services to migrant workers from Lesotho, Mozambique and Swaziland.

Mobile banking evolution

FNB says cellphone remittances for migrant workers should be addressed as part of the African mobile banking evolution. The World Bank states remittances to developing countries peaked at $283 billion (R2.8 trillion) last year, yet they decreased for some countries in North Africa and remained stable in Sub-Saharan Africa.

Van Wyk says the continent has reached a threshold where mobile usage is at the same level as that in western countries. She also points to a report by the Genesis Analytics estimating that close to R6.2 billion was remitted across the border in 2005.

Van Wyk feels strongly that the market is there to provide affordable and accessible cellphone remittance services for migrant workers, since the formal channels are mostly banks and tend to be pricey.

Targeting the unbanked

Earlier this year, MTN and Standard Bank entered a partnership to provide a mobile banking solution for the unbanked portion of SA's population, which is estimated at 49% of the total.

MobileMoney is being piloted in 14 MTN outlets across the country and enables cash transfers without the use of a bank account. Money transfers will only be allowed within the borders of SA and the mobile operator says the pilot will not restrict the service to MTN customers.

In 2007, MTN took part in a six-month GSM Association pilot programme aimed at enabling the world's 200 million international migrant workers to send money to their dependents in their home countries.

MTN was one of 19 mobile operators, with networks in more than 100 countries and around 600 million customers. The operators provided MasterCard access to their networks so that migrant workers could initiate international money transfers using mobile phones, and their families will be notified of the transactions via cellphone.

The programme sought to extend international payment to more than 1.5 billion users and, in effect, grow the international remittances market to over $1 trillion (R10 trillion) by 2012.