Ericsson banks on MTN's mobile money arm for Africa fintech play

Ericsson might be better known for making 5G networks than facilitating payments, especially in Africa. However, the Swedish multinational also operates the Ericsson Mobile Wallet Platform, which exists to tool up mobile financial service providers across the world. 

The mobile connectivity-based platform, whose holistic suite of services includes technology, deployment, and operational support, is now joining forces with MTN MoMo, a mobile money platform under the auspices of Africa's largest telecoms operator.

This collaboration, a continuation of both parties' longstanding relationship, aims to expand financial inclusion in the continent, targeting everything from first-time users to established business applications. With Ericsson's wallet, MTN MoMo can facilitate convenient, secure transactions. 

With an emphasis on fintech, the partnership would foster the growth of merchant and eCommerce payments, as well as national and international money transfers for customers. It would also offer digitized banking solutions and insurance coverage.

MoMo has more than 63 million active users in 16 African countries. Its yearly transaction value more than doubled from $76 billion in 2018 to $204 billion in 2022. During the same period, its transaction volumes went from 3.5 billion to 12.7 billion. As of Q3 2023, the service had around 61.7 million active customers. 

Meanwhile, Ericsson Wallet Platform anchors over 400 million mobile wallets globally, and handles more than 2.8 billion transactions worth north of $40 billion monthly via financial institutions and communication service providers alike. 

"MTN Mobile Money offers a spectrum of mobile financial services, encompassing money transfers, payments, savings, and loans for every consumer, actively driving financial inclusion and advancing economic empowerment across the continent, says Serigne Dioum, Chief Fintech Officer of MTN Group. 

"Our collaboration with Ericsson is a significant milestone in the execution of our Ambition 2025 - building the largest and most valuable platform business and creating shared value for our customers in Africa," Serigne adds. 

Michael Wallis-Brown, Head of Mobile Financial Services, at Ericsson, says: “Ericsson’s partnership with MTN is a world-leading example of the ability of mobile financial services to financially empower people and business.”

He adds: “This model can be applied in any market anywhere in the world to genuinely empower mobile subscribers of all financial standings. Our valued MTN partnership also supports Ericsson's AfricaInMotion vision to promote a sustainable and connected Africa.” 

This development is happening at a crucial time. Buoyed by an e-payment boom, mobile money has become a sought-after service in almost every pocket of the continent. 

Per the GSMA's State of the Industry Report on Mobile Money 2023, registered mobile money accounts in Africa increased 17 percent year-on-year to 781 million in 2022, accounting for almost half of the global 1.6 billion count. 

Transaction volumes and value for the same period increased 21 percent to 45 billion and 22 percent to $832 billion, respectively. Experts say regulatory changes in key markets like Kenya, Nigeria, and Ethiopia have contributed to the growth.