South African cellular companies must collaborate with banking institutions to ensure an increase in the uptake of mobile money services in the country, an Ericsson official has said.

The head of mobile commerce sales EMEA at Ericsson, Rajiv Bhatia, told ITWeb Africa that a large percentage of the South African population remains unbanked, opening up opportunities for M-Pesa-like services.

Survey results published by FinMark Trust last year said that 25% of South Africa’s 51 million population do not have bank accounts.

South Africa; though, has a small mobile money user population.

Vodacom and Nedbank’s mobile money service, M-Pesa, was introduced to the South African mobile market in 2010, but in 2012 it recorded only 1.2 million users. Vodacom does plan on relaunching its M-Pesa service in South Africa.

Meanwhile, First National Bank (FNB) has also recorded only over 1.8 million South African users of its eWallet service.

Kenya, in comparison, has over 20 million mobile money users in the country, according to the country’s telecoms regulator.

“Mobile money in the traditional sense has not been very popular in South Africa,” Bhatia told ITWeb Africa.

“We feel that operators can tie up with the banks, because operators have been very good at marketing services to a lot of consumers especially the unbanked individuals.

“Operators have a distribution channel, which can be used to roll-out mass mobile services to consumers and the banks can manage the more core business, like managing risks and deposits,” Bhatia said.

Bhatia went on to say that challenges facing mobile money uptake in South Africa include the ease with which the country’s citizens can already move money around thanks to a developed banking infrastructure.

Bhatia was attending the Mobile Money and Digital Payments conference in Johannesburg on Wednesday.