Togocom Launches New Subsidiary to Manage Mobile Money Segment

Telecom

Monday, 28 October 2024 13:02

Togocom Launches New Subsidiary to Manage Mobile Money Segment

(Togo First) - The Togocom group, which is 51% owned by Madagascar's Axian, is separating its mobile money services into a new entity called Tmoney S.A. This company was established in April with a share capital of CFA1 billion and is registered as a financial company focusing on money transfers and e-money services. Catherine Savery has been appointed as the Managing Director of Tmoney S.A. Savery previously worked as an audit expert at Axian.

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Current regulations from the Central Bank of West Africa, the BCEAO, require financial institutions wanting to issue or manage electronic money to obtain a license or partner with a licensed bank. Previously, Togo Cellulaire, the telecom operator, had to collaborate with a local bank (BTCI, now IB Bank) to financially transact with the BCEAO.

In this regard, Tmoney S.A. will be directly supervised by the BCEAO and must adhere to regulatory requirements regarding capital, risk management, compliance, and transaction oversight.

This move aligns Togocom with trends seen in other countries in the region, such as Benin, where MTN has launched MTN Mobile Money for money transfer services alongside its telecom operations. The restructuring could also impact the existing partnership between BTCI and Togo Cellulaire regarding mobile money services.

Togocom's decision indicates its increasing interest in the mobile money market; a market with significant growth potential in Togo. As of June 2024, the mobile money penetration rate stood at 45.4%, dominated by Tmoney and Flooz.

Regarding taxation, this change may clarify tax provisions in Togo, where mobile money activities have previously been in a gray area regarding VAT and the Tax on Financial Activities (TAF). Tmoney should align its operations solely with the TAF.

As of the first quarter of 2024, the mobile money sector had 3.55 million users, with 60% (2.16 million) using Tmoney through Togo Cellulaire and 40% (1.4 million) using Flooz from Moov Africa Togo. The sector is attracting more players, including non-telecom operators like Gozem, which recently launched Gozem Money for electronic money services.

Ayi Renaud Dossavi

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