MTN Launches MoMo Pay for Informal Payments Market

MoMo Pay, an inexpensive digital payment system intended for unofficial retailers, is MTN South Africa’s entry into the cutthroat payments industry.

Cash still accounts for more than 95% of transactions in South Africa’s unorganized sector, leaving millions out of the official economy, exposing businesses to theft, and restricting their access to credit. MoMo Pay, according to MTN, is a solution to this disparity.

MTN South Africa’s fintech CEO, Kagiso Mothibi, stated, “We are not just digitizing payments, we are unblocking a pathway to financial dignity and scalable opportunity.”

MTN’s drive coincides with significant digitalization investments made by South African banks and competition for a piece of the payments business from fintech companies like Yoco and iKhokha. The fight is getting more intense as competing cellular companies and social media behemoths join the fray. The advantages of MTN include its well-established mobile network, its fast expanding user base (there are currently 13 million MoMo customers in South Africa), and its emphasis on high-access, low-cost solutions.

For a small price of just 0.5%, which is much less than most other services now available, MoMo Pay enables businesses to accept immediate payments via QR code, merchant ID, or payment request. Additionally, users can sell transportation tickets, prepaid power, and airtime on the platform, earning commission for each sale.

Traditional entry hurdles are eliminated by MoMo Pay, which prioritizes mobile users and does not require papers or a registration fee. Mothibi stated, “Just a smartphone and a vision to grow.” Thousands of businesses have already been onboarded by MTN, and townships, rural villages, and busy urban areas have all witnessed rapid uptake. Onboarding and training are supported by a specialized merchant acquisition team.

In order to integrate unofficial enterprises into the formal economy, MTN has laid out a bold plan for MoMo Pay, establishing it as the cornerstone of a larger digital financial ecosystem. The platform is anticipated to develop to include services including access to microloans, savings plans, and insurance—tools that are normally out of range for many informal traders—in addition to enabling inexpensive digital transactions.

Mothibi claims that the business sees unofficial retailers as vital hubs in their local communities. He noted the platform’s potential to increase economic involvement through easily available financial services and stated, “We see MoMo Pay merchants not just as sellers but as community hubs.”

MTN intends to onboard hundreds of thousands of small enterprises in order to digitize a sizable chunk of the unorganized sector over the course of the next three to five years. The goal of this growth plan is to remove long-standing obstacles to financial inclusion and provide microbusinesses with access to formal financial infrastructure.

Mothibi stated, “MoMo Pay is a strategic step in enabling digital participation for informal traders.” Supporting sustainable growth at the local level, where traditional financial services frequently fall short, is the goal.