Lagos, Nigeria – MTN Nigeria is taking significant steps to enhance its presence in Nigeria’s rapidly growing digital payments sector by submitting applications for two key licenses under the Central Bank of Nigeria’s (CBN) regulatory framework: the Payment Service Solutions Provider (PSSP) and the Payment Terminal Service Provider (PTSP) licenses. These licenses are intended for MoMo Payment Service Bank (MoMo PSB), MTN’s fintech subsidiary.
The applications represent MTN’s push to simplify its payment processing infrastructure and deepen its competitive engagement with established financial platforms. With the PSSP license, MoMo PSB will be empowered to handle payment gateways, offer merchant aggregation services, and create tailored financial solutions for its growing customer base. This move will allow MTN to internalize its payment processes, reducing reliance on third-party processors and enabling the company to better meet the payment needs of merchants and business partners.
The PTSP license would enable MoMo PSB to deploy and manage Point-of-Sale (PoS) terminals across Nigeria, enhancing its support for small and medium-sized businesses (SMBs). By expanding into PoS services, MoMo PSB will directly compete with leading players such as Moniepoint, Opay, and Palmpay, which are dominant in the payments space.
Expanding MoMo’s Reach: A Strategic Growth Initiative
MTN’s fintech expansion is already underway, with MoMo PSB reaching a significant milestone of 5.5 million active wallets as of Q2 2024, alongside a network of over 302,000 agents and merchants nationwide. The new licenses will allow the company to further penetrate Nigeria’s digital payments market, where demand for secure, reliable, and efficient payment solutions continues to rise.
MTN’s MoMo PSB has already achieved notable growth, having transitioned from the limited offerings of its predecessor, Yello Digital Financial Services (YDFS), which was launched in 2018. Initially, YDFS operated under a super-agent license, offering basic services such as bill payments and money transfers. However, due to regulatory constraints, YDFS could not hold customer funds.
In 2022, MTN took the next step by launching MoMo PSB under a full Payment Service Bank license, which expanded its capabilities to include airtime sales, bill payments, and money transfers. While still restricted from offering lending and foreign currency services, MoMo PSB has continued to build a large customer base and agent network, positioning itself as a key player in Nigeria’s digital finance ecosystem.
A N200 Million Investment in Nigeria’s Fintech Future
The applications for the PSSP and PTSP licenses are a major part of MTN’s long-term strategy to solidify MoMo PSB’s role in Nigeria’s financial services industry. As part of the licensing process, MTN has reportedly paid N200 million, which includes an initial N100,000 application fee and a subsequent N100 million fee upon final approval. This reflects the telecom giant’s commitment to scaling its fintech operations and leveraging its extensive telecommunications infrastructure to offer seamless financial services.
By securing these licenses, MTN intends to position MoMo PSB as a formidable competitor in the digital payments and PoS services sectors, challenging well-established players like Interswitch and Flutterwave. The move also underscores MTN’s broader strategy of diversifying its business beyond traditional telecom services and tapping into the burgeoning fintech market in Nigeria and across Africa.
A Competitive Edge in Nigeria’s Digital Economy
As MTN pushes forward with its plans, the company is keen to capitalize on Nigeria’s expanding digital economy, which is increasingly driven by mobile payments, e-commerce, and the adoption of digital financial services. The addition of payment gateway solutions and PoS terminals will not only enhance MoMo PSB’s offerings to individual consumers but also provide much-needed tools for businesses, particularly in the SME sector, to thrive in a digital-first economy.
With the Nigerian fintech space growing rapidly, MTN’s move to secure the PSSP and PTSP licenses places it in direct competition with other fintech giants like Flutterwave, Interswitch, and Paystack. This expansion reflects MTN’s ambition to become a leading player in the region’s digital payments landscape, and with the new licenses, MoMo PSB is set to strengthen its foothold in a competitive and lucrative market.
As of Q2 2024, MTN’s fintech subsidiary continues to expand its footprint, aiming to build on its success and transform the digital payments landscape in Nigeria. With millions of active users and an extensive network of agents and merchants, MoMo PSB is well-positioned to benefit from Nigeria’s ongoing fintech revolution.