Vodacom and Nedbank launch mobile cash service

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South Africa’s largest mobile phone group, Vodacom, is teaming up with Nedbank to deliver a phone-based cash transfer service, similar to Kenya’s M-Pesa, according to Reuters.

The product, also known as M-Pesa, will initially allow users without access to bank accounts to transfer money using their mobile phones and eventually to pay bills and buy goods.

The service was developed by Vodafone, the majority shareholder in Vodacom, and part owner of Kenya’s Safaricom, which provides the service there.

Safaricom, Kenya’s largest mobile provider, started its M-Pesa service in March 2007. About 10 million people use it.

“In South Africa, mobile penetration is extremely high, and yet it is estimated that more than 13 million economically active South Africans do not have a bank account,” says Mike Brown, CEO, Nedbank.

Only one in five African households in Africa had access to a bank account, according to the United Nations, but a much higher proportion have a mobile phone.

Telecoms trade body GSMA has predicted that operators could make $5 billion from financial services by providing banking-type services to 364 million people without bank accounts by 2012.

Money transfer has also been successful in Uganda. In May MTN Uganda, a unit of MTN said it expects users of mobile money services to grow by three-quarters by 2011. It had registered 890,000 mobile money users and said it expects more than 2 million users of its mobile money services by the end of the year and 3.5 million users by 2012.

MTN has already launched MobileMoney in South Africa, Rwanda, Cote d’Ivoire, Benin and Yemen. Vodafone also offers M-Pesa mobile money in Afghanistan and Tanzania, while Bharti Airtel has Zap mobile cash transfer service in Kenya and Tanzania launched by Zain.