MTN Nigeria gets approval to offer mobile money payments in Nigeria
In accordance with a regulatory filing, MTN Nigeria has disclosed that it has received final approval from Nigerian regulators to operate a payment services bank (PSB).
As can be seen from the filing, the bank had already received notification of the approval in principle from the Central Bank of Nigeria (CBN) in November 2021, and the confirmation message dated April 11, 2022 was almost a formality.
The telecom operator has had plans in place to move into the mobile money market since launching its mobile money product, MTN MoMo, in 2019.
In January 2022, MTN revealed that MTN Nigeria’s mobile money (MoMo) service had attracted 9.4 million active users since its launch in August 2019, growth which the company said provided a “base solid” for the next creation of the bank.
According to MTN, it will communicate the launch date of its payment service bank to the Central Bank of Nigeria as it targets the large portion of Nigerians who are not included in the current financial system.
According to Business Insider, more than 60 million Nigerians are financially excluded.
The future bank is expected to increase the use of mobile money in this populous country, as evidenced by the reactions of some of the leading technology innovators in Nigeria and Africa:
Jason Njoku, founder of video on demand service, IrokoTV, highlighted how mobile money is commonplace in several countries and not so much in Nigeria where there is so much potential with its huge population. This sentiment was supported by Cameroonian entrepreneur, Rebecca Enonchong, who added that Nigeria is finally getting mobile money.
Ugandan Fintech entrepreneur, Stone Atwine, Founder of Eversend App, also expressed the ramification that could emerge from scaling up MTN’s mobile money services in Nigeria.
The Nigerian mobile money landscape has stagnated because the CBN does not grant mobile banking licenses to non-financial companies such as telecom operators, which limits the breadth of their offerings.
However, in 2018, the Central Bank gave the first indication that it would allow non-financial businesses to apply for mobile banking licenses, either as payment service banks (PSBs) or as money operators. mobile (MMOs).
Under these guidelines, mobile network operators are allowed to provide financial services to millions of unbanked Nigerians. However, they can only do this as a PSB and through a separate subsidiary from their core business.
Thus, MTN will provide PSB services through MoMo.
Although they are similar to typical banks, the scope of the PSB license is strictly to deepen financial inclusion among the large unbanked population of Nigeria and the regulator prohibits them from engaging in credit risk operations and change.
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