Mxit edges closer to banking
Mxit has launched a new service that allows users to transfer, spend and withdraw money from the social network. By Craig Wilson.
Mxit Money, a partnership between mobile social network Mxit and Standard Bank, has been launched that allows Mxit users to send money to one another for free, transact with that money, and even withdraw it. Users can also send money to other mobile phone users for a nominal fee.
Mxit CEO Alan Knott-Craig says Mxit Money is about plugging those without smartphones, computers or credit cards into the digital economy. Though the service is available first through Standard Bank, Mxit says the platform is open and the company is pursuing similar deals with other banks.
The service will be launched to the entire Mxit user base on 15 September. Before then, it is be available to 15 000 users. Users who install the application will be prompted to request an invitation to use the service.
Knott-Craig says Mxit Money is not just an “Africa play” — Mxit is interested in learning what users do with it beyond buying airtime and electricity.
Users can deposit and withdraw cash, purchase Mxit’s digital currency, Moola, or airtime and electricity. The system uses Standard Bank’s Instant Money service and for the first time allows users to get money out of the Mxit ecosystem.
Instant Money is an electronic currency developed by Standard Bank used mainly for person-to-person money payments. The product is aimed at the unbanked and is also used to facilitate online payments without customers needing a credit card or bank account.
Users wanting to withdraw money, rather than using it for purchases in Mxit, can withdraw cash at Standard Bank AccessPoints or participating Spar supermarkets. After the September launch, users will also be able to make withdrawals at Standard Bank ATMs.
The fees for the service are set by Standard Bank. Deposits, which can be made at the same points as withdrawals, cost R9,95. Sending money to other Mxit users is free, but users will pay R7 to make a withdrawal. Sending to a non-Mxit Money user will cost the sender R7 and the recipient can then withdraw the cash for free.
Users are thus incentivised to keep money in the system and spend it on products or services which do not incur charges. Knott-Craig says one of the advantages of the system is that purchases aren’t limited to virtual goods. Users can use the service to buy real-world goods, or can accept money themselves like a merchant would in exchange for goods or services.
John Campbell, head of Standard Bank’s Beyond Payments innovations unit, says the service is not a wallet product, but rather it offers the “ability to look into your Instant Money world and transact with that value”.
The service is available to feature-phone owners and as a standalone application for iPhone users. An Android version of the app will follow soon. iPhone users can download the Mxit Money iPhone App from the Apple App Store, while feature-phone users need to add “mxitmoney” as a contact inside Mxit.
From September, Standard Bank customers will also be able to load Instant Money at a Standard Bank ATM or using Internet banking. — (c) 2012 NewsCentral Media