French banking group Societe Generale is ending its mobile money service YUP, created in 2017, in Côte d'Ivoire, Senegal, Burkina Faso, Cameroon, Guinea, Ghana, and Madagascar. The information was disclosed in a letter sent on March 1, 2022, by Nicolas Pichou, CEO of Societe Generale Cameroon, to his employees.
"Dear colleagues, 5 years ago, anxious to promote financial inclusion and facilitate access to innovative fund transfer means by notably dematerializing companies’ payment flow, the AFMO (Ed.note: Africa and the Middle East) Business Unit launched an electronic money service and created a dedicated entity YUP. Despite all the efforts made by the YUP teams in the 7 geographic zones concerned, including Cameroon, to develop our market share and improve the experience, the service has not succeeded in creating a viable model and the market outlooks do not comfort us in planning for the continuation of this segment. In that circumstance, Societe Generale Group, in consultation with all its local subsidiaries, took the difficult decision to stop the operations of YUP in all the geographic areas where it was deployed,” explains the letter sent by Nicolas Pichou.
In short, despite all the resources deployed over the past five years to capture shares of the highly dynamic mobile money market, YUP has proven unprofitable for Société Générale. In the case of Cameroon, the reason for this failure is the undisputed supremacy of the country's two main mobile operators (MTN and Orange namely) in this market. Those operators entered the local market almost ten years before YUP and have had the opportunity to establish a network that leaves almost no room for newcomers.
Over 19 million active mobile money accounts
In July 2021, when celebrating its 10th anniversary in the Cameronian mobile money market, Orange Cameroon claimed it was controlling 70% of the market share, with cumulative transactions amounting to CFA800 billion yearly. "When I say cumulative transaction values, I mean deposits and withdrawals, money transfers, bill payments, salary payments, and everything else that is merchant payment, etc. Our daily cumulative transactions amount to CFA3 million,” explained Emmanuel Tassembedo, director of Orange Money Cameroon.
MTN Cameroon is a bit cautious as far as its mobile money market share is concerned. Its executives claim MTN Mobile Money had 5.6 million active subscribers in the second quarter of 2021, at least 168,000 points of presence across the country, including 108,000 merchant points and 60,000 distribution points.
Both operators offer innovative services like insurance subscriptions and tax payments. According to the Ministry of Finance, in Cameroon, close to CFA10 billion of taxes were paid through the two mobile money operators.
Let’s note that Cameroon is CEMAC’s leader in the mobile money segment. According to data published by the central bank BEAC, in 2020, there were 19.1 million active mobile money accounts in Cameroon. This was 64.8% of the 30.1 million mobile money accounts active in the CEMAC region whose membership includes six countries (Cameroon, Congo, Gabon, Chad, the Central African Republic, and Equatorial Guinea). During the period, mobile money service providers active in Cameroon carried out 73.13% of the transactions recorded in the community space.
Brice R. Mbodiam
