MTN South Africa has introduced MoMo Pay, a low-cost digital payment platform tailored for informal merchants. The platform aims to digitize the cash-heavy informal sector.

This move is part of the telecom giant’s vision to drive financial inclusion and economic participation among underserved communities.

In South Africa, cash remains significant particularly in the informal sector (90–95% of transactions) and for POS (ranging from 35–53%) in recent years.

Cash is preferred due to its accessibility, low transaction values, and lack of reliance on digital infrastructure, which may be limited in rural or underserved areas.

Meanwhile, cash reliance by the informal sector poses several implications, as the high usage of cash, supports liquidity in the informal economy but poses challenges like security risks (cash theft) and difficulty tracking transactions for tax purposes. It also limits financial inclusion, as cash-heavy systems make it harder for individuals to build credit histories or access formal financial services.

Launched in May 2025, MoMo Pay addresses risks like theft, limited credit access, and exclusion from the formal economy, offering a pathway to financial inclusion for millions. “We are not just digitizing payments, we are unblocking a pathway to financial dignity and scalable opportunity,” said Kagiso Mothibi, Fintech CEO at MTN South Africa.

“Our vision is simple: we want every informal trader in this country to have a shot at digital prosperity. MoMo Pay is our first major move to make that happen because real inclusion starts at the street level”, he added.

Mothibi emphasized the role of informal merchants as “community hubs,” fostering economic participation through accessible financial tools. MTN has already onboarded thousands of merchants, with especially strong uptake in townships, rural areas, and busy urban zones.

Over the next three to five years, MTN aims to onboard hundreds of thousands of small businesses, digitizing a significant portion of the informal sector and creating pathways to formal financial infrastructure.

MoMo Pay enables merchants to accept instant payments via QR codes, merchant IDs, or payment requests with a minimal 0.5% transaction fee, significantly lower than competitors. The platform requires only a smartphone, eliminating paperwork and registration fees.

Merchants can also earn commissions by selling airtime, prepaid electricity, and transport tickets. With 13 million registered MoMo users in South Africa, MTN leverages its robust mobile network to drive adoption, particularly in townships, rural areas, and high-traffic urban zones.

MoMo Pay enters a crowded market, competing with South African banks’ digital platforms and fintechs like Yoco and iKhokha, as well as social media giants and rival telecoms. MTN’s edge lies in its established infrastructure, growing user base, and focus on affordability.

MTN has extended MoMo Pay to several African markets, leveraging its fintech platform to enhance financial inclusion:

MoMo Pay targets merchants like supermarkets, pharmacies, and motorcycle taxis (Zemidjan) in Cotonou, with plans for nationwide expansion. It allows contactless payments and change directly into MTN Mobile Money accounts.

Introduced in January 2017, MoMo Pay focuses on digitizing merchant payments in open markets, particularly for female merchants, to drive financial inclusion. A GSMA case study highlighted its impact on expanding mobile money use among women.

MoMo Pay supports secure, instant payments for businesses, with partnerships like Flutterwave enhancing merchant acceptance. MTN’s focus includes scaling Banktech products like loans and e-commerce payments to achieve a cashless economy.

MTN envisions MoMo Pay as the cornerstone of a broader digital financial ecosystem, integrating informal businesses into the formal economy. The platform plans to expand beyond payments to offer microloans, savings products, and insurance, addressing barriers faced by informal traders.