Mxit is on the move with moola

Mxit Money uses the existing Mxit Moola system, but makes it easier for the 10 million active Mxit users in South Africa to transfer money and pay for prepaid cellular airtime and electricity.

"This is for an audience that doesn't have laptops, smartphones, or credit cards," said Mxit CEO Alan Knott-Craig.

When Mxit launched, he said, it focused on free messaging. Now it is focusing on payments.

"This is not a South African play. It is for the whole continent. Lighting it up with communication was the first step. Lighting it up with payment is the next level," Knott-Craig said.

Money is deposited into the system using Standard Bank's Instant Money, which has a R9.95 flat fee. Withdrawals cost a standard R7. Mxit makes 5% on selling airtime and 2% on electricity, but charges no other fees.

"We don't make any money because it plays towards people making more content purchases. We are not trying to trick anyone," he said.

John Campbell, head of Beyond Payments, which is Standard Bank's innovations division, said the potential was "huge".

"This is simply because it now allows people with a phone and no banking relationship - or no desire to have such a relationship - to move money, to store money (although this is not a savings product) and participate in a mobile economy," Campbell said.

Africa has a billion inhabitants but only 50 million bank accounts, he said.

Mobile money is one of the most exciting developments in communications technology and financial inclusion. Some 80% of mobile money transactions globally are in East Africa, said the GSM Association. In Kenya, M-Pesa is a runaway success, with 40% of its GDP passing through it.

According to research presented by Mxit, South Africa will have 14 million cellphone users making R7-billion in mobile payments by the end of the year.

Money can be deposited or withdrawn into Mxit Money at around 8 000 Standard Bank access points, more than 600 Spar till points and, from 1 September, at Standard Bank ATMs, said Kobus Ehlers from Stellenbosch firm FireID, which is involved in building the payment system.

Arthur Goldstuck, managing director of researchers World Wide Worx, said: "It's a superb initiative. The biggest barrier to mobile money uptake is its complexity and this simplifies it tremendously."

Source: The Times