Johannesburg - MTN Group has partnered with rival cellular network operator and former suitor Bharti Airtel’s African subsidiary in a cross-border remittance deal to transfer money between Ivory Coast and Burkina Faso.
It has been hailed as the first cross-border cellphone-to-cellphone remittance service in west Africa – a region where financial inclusion is low.
Yesterday, the firms said the “landmark partnership” would enable mobile money users of MTN Ivory Coast and Airtel in Burkina Faso to transact between the neighbouring countries.
“Until now, moving money between the two countries was mired by high fees, high usage of informal channels and a lack of proximity to withdraw money,” the companies said.
Pieter Verkade, MTN’s chief commercial officer, said a sizeable community of Burkinabé worked in Ivory Coast and sent their money back to their home country.
Ivory Coast has a population of just over 19 million, according to World Bank data.
MTN competes against Celpaid, Moov, Orange and Qash Services, which also offer mobile money services in the country, where more than 90 percent of the population has access to a cellphone but only 14 percent has access to financial services. This is according to data by the International Finance Corporation reported last year.
Sibonginkosi Nyanga, an analyst at Imara SP Reid, quoted research from the World Bank to say that remittances supported a third of Burkina Faso households.
In 2012, Burkinabé expats sent home $130 million (R1.4 billion) in remittances, which included $102m from Ivory Coast.
About 8 percent of Burkina Faso’s 15.5 million population live in Ivory Coast, according to 2010 World Bank figures.
About 840 000 Ivorians live in Burkina Faso.
“All leading African mobile phone companies are venturing into mobile money to broaden their revenue streams and it’s actually a no-brainer. That’s extra revenue on the infrastructure that is already there,” Nyanga said.
The Central Bank of West African States, which governs monetary policy in the eight-nation currency region that includes both countries, has developed a five-year plan to improve financial inclusion.
In 2006 the authority issued regulations that qualify non-banking institutions to receive e-money issuer licences.
Chidi Okpala, the director for Airtel Money, said the partnership was symbolic as the first cross-border service in west Africa.
MTN Mobile Money had 14.8 million registered users by the end of last year. The service, which allows customers to make local and international money transfers, pay bills, buy airtime and access other cellphone-based financial products, is available in 14 countries.
India’s Bharti Airtel operates in 20 countries across Asia and Africa. It had more than 289 million customers at the end of January.
In 2009, MTN and Bharti Airtel called off more than four months of merger talks after the South African government rejected the structure of the $23bn deal.