MTN teams up with Western Union on mobile money

Competition in mobile money transfer services in Africa and the Middle East has moved up a notch higher following the move by MTN and Western Union to introduce international remittance services in 21 countries where MTN has a presence.

MTN's MobileMoney transfer service is expected to compete regions where regional operator Zain is already operating its Zap money transfer service.

The service will allow MTN subscribers in the two regions to send and receive money through Western Union money transfer transactions using their MTN MobileMonday account. The service will be first introduced in Uganda, where MTN's mobile money service already boasts over 1 million registered customers.

MTN subscribers registered for MobileMoney will be able to receive Western Union money transfer transactions in their mobile phones. According to the World Bank, Uganda receives nearly US$500 million in remittances every year, making up 3 percent of the country's gloss domestic product (GDP).

The teaming up of MTN and Western Union comes less than a week after the operator announced it was working with Ezetop International and Sochitel UK, an online airtime top-up provider, for distribution of MTN airtime throughout its 21 operations in the two regions and more than 400,000 outlets overseas. The international remittance agreement will enable people living, working or visiting abroad to purchase MTN airtime for family and friends back home through the Ezetop and Sochitel outlets worldwide.

Most Africans are now using mobile financial services to buy good, pay utility bills, buy mobile airtime as well as receive funds from abroad.

"The alliance will introduce cross-border to customers by allowing them to send or receive money using just their mobile phones," said Khalid Fellahi, Western Union head of Mobile Transaction Services.

Generally, most Africans do not have bank accounts and customers typically have to travel long distances to access traditional bank facilities. As a result, Africa is experiencing an explosion in mobile money transfer services as banks and mobile providers compete for customers who otherwise would not have a bank account.

An MTN subscriber who receives a Western Union mobile money transfer transaction in his MobileMoney account will be able to use the funds to pay bills, top-up airtime, send money domestically and internationally and withdraw cash at MobileMoney agents or any participating Automated Teller machine (ATM).