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Ericsson targets fintech growth through MTN partnership

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Swedish multinational Ericsson is looking to grow its mobile financial services (MFS) business in Africa even further through an extended partnership with pan-African operator MTN.

Ericsson is best known as a networking and telecommunications company, but in recent years it has been pushing further into the MFS space, providing the underlying technology to major fintech brands.

This week Ericsson and MTN strengthened their existing partnership "to broaden the scope of financial inclusion from first-time users to high-end business applications," utilizing MTN's Mobile Money (MoMo) service on the Ericsson Wallet Platform.

The Ericsson Wallet Platform already supports more than 400 million registered mobile wallets and processes more than 2.8 billion transactions, worth more than US$40 billion, every month. It operates across 24 countries, 19 of which are in Africa.

Ericsson is currently covering 10% of the African market and aims to get to 50%.

One of its major partners is MTN, which already has over 63 million active MoMo subscribers across 16 African countries.

MTN MoMo's annual transaction value has almost tripled since 2018, growing from $76 billion in 2018 to $204 billion in 2022. MTN said its transaction volumes increased by almost 300% during the same period from 3.5 billion transactions in 2018 to 12.7 billion in 2022.

Partnership extends to enterprise

MTN's partnership with the Ericsson Wallet Platform already enables individuals to manage funds, pay merchants and utility providers, and access loans and insurance services. Now the deal further extends capabilities into the enterprise market.

The partnership extension signed during a visit by senior MTN Group executives to Ericsson's Group Headquarters in Kista, Sweden includes a transition to public cloud deployments and a refinement of its open API services framework.

"It will give entrepreneurs an opportunity to develop revenue-generating applications and, by utilising Continuous Integration/Continuous Deployment (CI/CD), will enable an automated software development and deployment workflow for the MTN Mobile Money (MoMo) fintech platform across all of its African operations," Ericsson said in a statement.

Serigne Dioum, chief fintech officer at MTN Group, called the collaboration with Ericsson a significant milestone in the execution of its strategy to build the largest and most valuable platform business.

"With 63.5 million active users, our Mobile Money platform is advancing economic empowerment across the continent. 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," Dioum added.

The Ericsson Wallet Platform supports more than 400 million registered mobile wallets and processes over US$40 billion every month.   (Source: diana.grytsku on Freepik)
The Ericsson Wallet Platform supports more than 400 million registered mobile wallets and processes over US$40 billion every month.
(Source: diana.grytsku on Freepik)

Ericsson's platform is also focusing on the growth of merchant and e-commerce payments, facilitating national and international money transfers, advancing banking solutions, and offering insurtech services.

Michael Wallis-Brown, head of MFS at Ericsson, said the partnership with MTN demonstrates how mobile financial services can financially empower people and business – including giving the unbanked a way to control their finances, making it easier for women to access financial services, and enabling more advanced users to access high-end services.

"This model can be applied in any market anywhere in the world to genuinely empower mobile subscribers of all financial standings," he added.

Last year, Ericsson's business development manager for MFS, Rosemary Kimaku, told Connecting Africa that every fifth transaction globally on mobile money passes through an Ericsson platform.

The Ericsson Wallet Platform also powers the digital payments of other operators like Mascom Botswana and Tmcel in Mozambique.

Ericsson's latest Mobility Report for November 2023 predicted that sub-Saharan Africa will have 760 million smartphone users by 2029, opening up even more growth for mobile fintech in the region.

Follow Connecting Africa on our new X account @connect__africa to get the latest telecoms and tech news across Africa.

Last week, Ericsson appointed Majda Lahlou Kassi as the vice president and head of Ericsson West Africa and Morocco, and she identified digital transformation in West Africa as one of her key priorities.

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*Top image source: wirestock on Freepik.

— Paula Gilbert, Editor, Connecting Africa

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