MTN Uganda talks Mobile Money: mobile transfer is just the beginning

Mobile Money from MTN Uganda is one of the pioneers of money transfer. The service was created by Fundamo, and it allows MTN customers to transfer money from one phone to another incredibly quickly through mobile accounts. This week MTN announced that it has acquired 900,000 customers in Uganda – often providing financial services to people in areas so poor that they can’t access a bank. GoMo News spoke to Richard Mwami, the Head of Mobile Money for MTN Uganda and Reg Swart, Senior VP for Fundamo Africa & Middle East, about the success of the service and its future plans.

Background

Mobile Money was introduced as a way for the “unbanked” to send money to one another. By simply entering the mobile number of a friend or a retailer, you can send money or pay for goods. MTN Uganda says that there have been 11.8 million transactions since launch in March 2009, and $195 million USD has been transfered through the platform.

And ambitiously, MTN has announced it expects to more than double it’s current subscriber base by the end of the year – and have 2,000,000 users on board by the start of 2011.

How did Fundamo and MTN come to start Mobile Money?

Reg: We’ve been working together for four years – the dream was to take the basic Fundamo product and add a layer of services that made it a uniquely MTN product. The two companies are completely strategically aligned. The Mobile Money board has executive representation from both companies.

There are other money services available, why is this one so popular?

Richard: Trust of the MTN brand is an important aspect. It’s a trusted service, which has really driven take up. But we also make contact with the actual service agents, and markets directly to them through what we call “footsoldiers”. There are over 3,500 people who go out every single day and make contact with the customers and retailers. We find them in their places of convenience, offices, night clubs. We show them the service, register them on it and get them activated.

Reg: Another big reason is that Fundamo spent over a year in Africa before the launch of Mobile Money, interviewing potential users of this service of all ages and business sectors. This market research allowed us to refine aspects of the service to make sure that it would be well received. In particular, this showed us that the service had to be incredibly easy to use and even easier to register on.

What market-driven changes have you had to make since launch to keep Mobile Money popular?

Reg: we expected the service to grow fast, so it was designed to handle a huge scale. But until it actually went ahead, we weren’t sure it would work. Mobile money transfer is far more complex than an ATM, for example, and it was very satisfying for us to see that the system worked perfectly. We’ve also continued to run our market-research program – the footsoldiers are still out there. So when a new bank or financial service provider asks us for particular information, we have it on hand.

How do you expect to more than double your current user base in less than 9 months?

Richard: well, first our footsoldiers will continue to drive numbers through direct marketing. Secondly, the service we have is peer-to-peer, person to person. We’re going to be rolling out more advanced services on the platform as well, which will increase numbers.

Reg: the platform has been built to handle very complex transactions. We’re using money transfer as a way of getting people onto the system, but the plan has always been to eventually grow the offering to handle international remittances, full payments, mobile insurance. The design is there already – the plan is to launch these services in stages as the consumers get used to them.

What are the largest technical challenges facing this kind of service?

Reg: the dependability and availability of the service is essential, especially in countries like Uganda where there may not be an alternative service. The more users we get on the system, the more important it becomes for the economy that the system never goes down, and never breaks. Because of that we’ve designed it with very strong redundancies. For me, that’s the big one to watch.

Richard: MTN never assumed we would have the number of customers we do now. Our initial projections were for around 450,000 customers now. So the robustness of the system, and being able to handle that scale, is very important to us.