A client using the MTN Mobile Money platform. Image Credit: NewTimes

Multinational Corporations, particularly in the Fast Moving Consumer Goods (FMCG) sector, as well as informal merchants, will soon benefit from reduced costs, increased security and greater efficiencies around payments. This follows a partnership agreement between MTN Business and Switching House, on a cashless payment solution that bridges the divide between large enterprises and the cash-based informal merchants.

“This solution is aligned with MTN’s efforts to deliver digital services to our multinational clientele, while at the same time serving the underserved. We estimate that around 70% of informal merchants in Africa are not able to make and receive electronic payments, and therefore recognise the value of inclusive payment solutions. This switching payment solution will enable MTN to increase the economic participation of informal cash only merchants in Africa while allowing users to safely transact in a digital space, to benefit both FMCGs and Consumers,” says Debbie Minnaar, General Manager: Products and Services, Group Enterprise Business Unit, MTN.

Leveraging off of MTN Mobile Money, the solution will enable informal merchants and traders to pay for goods using their mobile device and without the need for a formal bank account. Multinationals benefit from transactions occurring in real-time, and the elimination of the risks and administrative overheads associated with cash transactions, as well as a reduction in costs associated with formal banking.

Customers can access the solution through various devices (smart and feature phones, using basic SMS or USSD) and it can be integrated into existing Enterprise Resource Planning systems.

The solution is currently active in Uganda and will be rolled out to further other African markets in early 2016.