Standard Bank and social network Mxit launched a new mobile money service in Johannesburg yesterday.
Mxit Money uses the existing Mxit Moola system, but makes it easier for the 10 million active Mxit users in South Africa to transfer money and pay for prepaid cellular airtime and electricity.
"This is for an audience that doesn't have laptops, smartphones, or credit cards," said Mxit CEO Alan Knott-Craig.
When Mxit launched, he said, it focused on free messaging.
Now it is focusing on payments.
"This is not a South African play. It is for the whole continent. Lighting it up with communication was the first step. Lighting it up with payment is the next level," Knott-Craig said.
Money is deposited into the system using Standard Bank's Instant Money, which has a R9.95 flat fee. Withdrawals cost a standard R7.
Mxit makes 5% on selling airtime and 2% on electricity, but charges no other fees.
"We don't make any money because it plays towards people making more content purchases. We are not trying to trick anyone," he said.