Mxit: on the money

After a rocky start to 2012, Mxit says that revenue and profits are up, active users are increasing – and plans are in motion for the company to move beyond simply being a mobile social network.

In the first months of 2012, Mxit saw a dip in revenue after an advertising move and the privatization of content. In July, Mxit CEO, Alan Knott-Craig told BusinessTech that the company had “turned the corner” and was on track to show a profit in 2012.

In terms of revenue and profits, Mxit confirmed that things have continued to improve at the company.

Additionally, Mxit reported that it is seeing, on average, 10 million active South African users on the platform in September – up from the 9.6 million users reported in August.

However, the company has set its sights beyond being a mobile social network, with a strategy in place to “penetrate the economic fabric of the continent”.

Mxit’s mobile money

In August, Mxit took a big step in implementing that strategy by partering with Standard Bank for the launch of Mxit Money.

Mxit Money is a gateway for mobile payment services that enables users to transact with their mobile phones. Users can access Mxit Money as a contact within the Mxit platform or by downloading the stand-alone iPhone application.

“The creation of Mxit Money allows real money to flow through the system. This increases the utility of Mxit, decreases the cost of Moola, and increases the revenue share available,” Mxit said.

The app was released in phased beta in August so that Mxit could do “live testing” with users in a controlled environment. This was so the company could fix any bugs before a wide-scale launch to the whole Mxit base.

While Mxit said that it could not reveal any transactional data, a company representitive did reveal the commerce platform’s current user figures.

“We currently have 2,000 users, and a further 50,000 on the waiting list. We notify the waiting list in batches of 1,000 to bring them onto the service,” the company’s spokesperson said.

“As the app has only been live a month its difficult to share usage patterns at this stage, but what we can say is the purchasing airtime is the most popular activity on the service,” the spokesperson said.

The mobile commerce platform makes use of Standard Bank’s Instant Money services, which is an electronic currency used between people who are unbanked, without the need for credit cards or bank accounts.

Banks buying in

On 2 October, Mxit announced that it was also partnering with FNB for FNB Moola+, adding the bank to its Mxit Money platform.

FNB Moola+ enables Mxit users to buy Moola, Mxit’s online currency, at discounted rates. The result is 35% bonus Moola for every rand spent, compared to buying it via premium-rated SMS.

“As Mxit’s platform strategy matures, there will be more opportunities to interact with applications, games and content and this will be done using our online currency,” Mxit said.

Mxit confirmed that other financial insitutions would soon be making use of the platform as well. “We are in discussions with several other financial institutions.”

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Mxit: on the money