Last week, two leading telecom service providers, MTN Nigeria and Airtel Nigeria, started their Payment Service Banks (PSBs). According to Enhancing Financial Innovation and Access (EFInA’s) 2020 report, while 45 per cent of adults have bank accounts, 36 per cent are still financially excluded. It is hoped the PSBs will bridge the gap in banking services, LUCAS AJANAKu reports.
MTN’s Mobile Money (MoMo) payment service bank (PSB) has begun operations in Nigeria. The operator with the largest subscriber base notified shareholders of the development, saying the opening of the bank followed a successful pilot initiated on May 16.
MTN said this is a key milestone in delivering the company’s Ambition 2025 strategic priorities, and the bank is poised to enable millions of unbanked and underserved Nigerians to access a wide range of financial service products.
In addition, the company said, MoMo wallets in the future will enable Nigerians in the diaspora to send money to any phone number in the country, “an important feature given Nigeria’s ranking as the destination for the highest remittance inflow in sub-Saharan Africa”.
Airtel Africa, leading provider of telecommunications and mobile money services, with a presence in 14 countries across Africa, also announced that its subsidiary SmartCash Payment Service Bank Limited (SmartCash PSB), has commenced operations in Nigeria.
MTN Group first announced its steps in the process towards final approval of the licence last November, saying this was subject to the fulfillment of certain conditions as stipulated by the Central Bank of Nigeria (CBN).
With the payment services bank licence, MTN Nigeria will offer a wider range of mobile financial services beyond the traditional person-to-person mobile money transfers, such as lending and bill payments.
The commencement of bank operations is a positive step in the telco’s fintech drive and comes as the MTN Group is on track to spin-off its lucrative fintech business.