MTN Seeks Financial Deal After Axing Australian Bank's TymeBy and
Mobile Money venture with Tyme wasn’t ‘commercially viable’
MTN’s hired executives with finance background to seek deals
MTN Group Ltd. will look for new ways to bring banking services to its customers’ mobile phones in South Africa after severing ties with Australian-owned partner, Tyme.
Africa’s biggest mobile-phone operator scrapped the Mobile Money payment service it ran with Commonwealth Bank of Australia’s Tyme due to a “lack of commercial viability,” said Maxwell Nonge, chief digital officer of the Johannesburg-based company’s local unit, without giving further detail. MTN retains a banking license together with a second partner, South African Bank of Athens, and can use that as a platform for new deals, he said.
“MTN is committed to remain a significant player in financial services and continues to explore opportunities in this space,” Nonge said in e-mailed comments on Tuesday.
MTN’s focus on its financial services and digital banking operations has sharpened following a wave of hires with experience in the industry. Rob Shuter, who starts as chief executive officer on March 17, has worked for both Standard Bank Group Ltd. and Nedbank Group Ltd. Stephen van Coller, MTN’s head of strategy, mergers and acquisitions, was CEO of Barclays Africa’s investment bank and incoming Chief Financial Officer Ralph Mupita was previously head of insurer Old Mutual Plc’s emerging markets unit.
Mobile Money had gained 5 million customers since its launch in 2012. Vodacom Group Ltd., the South African unit of Vodafone Group Plc, stopped offering its mobile-banking product M-Pesa in the country as the strength of the banking system means fewer customers are taking up the service than in other sub-Saharan African markets.
For Tyme, the loss of the MTN alliance leaves the firm with supermarket chain Pick n Pay Stores Ltd. as its sole partner with direct access to South African consumers. While the Johannesburg-based company is trying to secure a banking license in the country, several developers have quit to join insurer OUTsurance, Johannesburg-based Business Day reported. Rolf Eichweber, the executive head of strategic partnerships and a co-founder of the company, resigned last month.
Tyme, which stands for Take Your Money Everywhere, can compete effectively in South Africa without MTN’s backing, spokeswoman Thoraya Pandy said on Monday. While Tyme’s website still notes its Mobile Money partnership with MTN, this information is “old and incorrect” and will be “fixed,” Pandy said.
South African billionaire Patrice Motsepe’s African Rainbow Capital Pty Ltd. will buy a 10 percent stake in Tyme, CBA said on Wednesday. ARC, as it’s known, will introduce black shareholders, Commonwealth Bank of Australia said, adding that through the Pick n Pay alliance Tyme has 685 kiosks and has registered 100,000 customer enrollments.