Telecom giant MTN has introduced MoMo Pay, a digital payment system designed specifically for informal merchants in South Africa. Announced on Friday, the initiative aims to be simple, affordable, and scalable.
MoMo Pay enables merchants to receive instant payments via a merchant ID, QR code, or payment request, charging a transaction fee of only 0.5 percent.
South Africa’s economy is mainly made up of small, informal enterprises, but many of them continue to function outside of the formal financial system due to a lack of secure credit, reasonably priced banking, or digital payment options.
In a nation where more than 80 percent of informal sector transactions are still conducted in cash, there is an urgent need for affordable, accessible financial tools.
“South Africa’s informal economy is rich with entrepreneurial potential, but until now, it’s been locked out of the digital finance revolution,” says Kagiso Mothibi, CEO of Fintech at MTN South Africa. “With MoMo Pay, we’re not just digitising payments – we’re unlocking a pathway to financial dignity and scalable opportunity for every vendor, spaza shop, and street trader.”
Services offered by MoMo Pay
MoMo merchants can earn commissions on each transaction by selling value-added services like airtime, data, prepaid electricity, DStv, Lotto, bus tickets, and more, in addition to taking payments. An airtime vendor, for instance, will receive a commission for each sale, converting each phone recharge into a steady source of income.
Adoption is increasing quickly. With the help of MTN’s committed merchant acquisition team, which offers seamless onboarding and on-the-ground training, thousands of merchants have already been onboarded.
MoMo Pay’s mobile-first user experience, quick setup, and no registration fee have already helped it gain popularity in townships, rural areas, and busy urban markets.
“We’ve designed MoMo Pay to be radically accessible,” Mothibi explains. “There’s no paperwork burden, no tech complexity – just a smartphone and a vision to grow.”
Beyond payments
However, MoMo’s goals go far beyond payment services. The platform is creating the groundwork for a comprehensive digital financial ecosystem that will allow merchants to save money, obtain microloans, insure their businesses, and eventually engage more fully in the formal economy. The network effect expands as more merchants sign up for the platform, resulting in a thriving, hyperlocal commerce engine.
“We see MoMo merchants not just as sellers, but as community hubs,” says Mothibi.
“They’re trusted touchpoints, and we want to give them the tools to do more, serve more, earn more, grow more.”
MTN wants to digitise hundreds of thousands of informal small and medium enterprises over the next three to five years, making MoMo Pay a vital component of South Africa’s financial inclusion and economic stability.
“Our vision is simple,” concludes Mothibi. “We want every informal trader in this country to have a shot at digital prosperity. MoMo Pay is our first major move to make that happen – because real inclusion starts at the street level.”
MTN MoMo is a fintech platform that offers various cutting-edge digital financial services to both businesses and consumers. It gives users access to remittance, lending, insurance, e-commerce, and payment services, among other things.