MTN enters payments market with MoMo Pay targeting cash-heavy informal sector

MTN South Africa has entered the competitive payments market with MoMo Pay, a low-cost digital payment platform designed for informal merchants.

Over 95% of transactions in South Africa’s informal sector are still cash-based, exposing traders to theft, limiting access to credit, and excluding millions from the formal economy. MTN says MoMo Pay is a response to this gap.

“We are not just digitising payments, we are unblocking a pathway to financial dignity and scalable opportunity,” said Kagiso Mothibi, fintech CEO at MTN South Africa.

MTN’s push comes as South Africa’s banks have already invested heavily in digitisation, and fintech startups like Yoco and iKhokha are also vying for a share of the payments market. Social media giants and rival telecom operators are entering the fray, intensifying competition. MTN’s edge lies in its established mobile network, a rapidly growing user base—now at 13 million registered MoMo users in South Africa—and its focus on low-cost, high-access solutions.

MoMo Pay allows merchants to accept instant payments via QR code, merchant ID, or payment request, at a minimal fee of just 0.5% – significantly lower than most existing services. The platform also enables users to sell airtime, prepaid electricity, and transport tickets, earning commission with each transaction.

MoMo Pay removes traditional barriers to entry – no paperwork, no registration fee, and a mobile-first experience. “Just a smartphone and a vision to grow,” said Mothibi. MTN has already onboarded thousands of merchants, with rapid adoption seen in townships, rural communities, and high-footfall urban areas. A dedicated merchant acquisition team supports onboarding and training.

MTN has outlined an ambitious roadmap for MoMo Pay, positioning it as the foundation of a broader digital financial ecosystem aimed at integrating informal businesses into the formal economy. Beyond facilitating low-cost digital transactions, the platform is expected to evolve to include services such as access to microloans, savings products, and insurance—tools that are typically out of reach for many informal traders.

According to Mothibi, the company views informal merchants as critical nodes within their communities. “We see MoMo Pay merchants not just as sellers, but as community hubs,” he said, noting the potential for the platform to enhance economic participation through accessible financial services.

Over the next three to five years, MTN plans to digitise a significant portion of the informal sector by onboarding hundreds of thousands of small businesses. This expansion strategy is aimed at addressing long-standing barriers to financial inclusion and creating pathways for micro-enterprises to access formal financial infrastructure.

“MoMo Pay represents a strategic step in enabling digital participation for informal traders,” Mothibi said. “The objective is to support sustainable growth at the grassroots level, where traditional financial services often do not reach.