Mobile Money

MTN and Airtel got Approval to Operate Payment Service Bank (PSB) in Nigeria

Just like MTN Mobile Money in Uganda and Airtel Mobile Money in Kenya, the Central Bank of Nigeria has given permission to both Telecommunication company to do the same in Nigeria.

Payment Service Bank of MTN and Airtel in Nigeria

The Telecommunication company got approval-in-principle to operate payment service bank (PSB) in the country, ” two years after they approach the regulatory for license.” This information was disclosed by both companies in the regulatory filing on the Nigeria Exchange Limited (NGX) on Friday.

 

What is Payment Service Bank (PSB)?

 

Payment Service Banks are banks that accept deposits from individuals and small businesses, carry out payment and remittance services within Nigeria, operate electronic purses, and do other activities prescribed by the CBN.
PSB operators provide seamless Financial service digitally to low income earners and the unbanked for easy and convenient transactions.
This will give MTN the priviledge to introduce it’s MoMO Payment Service Bank units and give opportunity to Jobless Nigerians to become a MTN MoMo agent.
Airtel as well will operate via its SmartCash Payment Service Bank Limited. All these is to bring financial support to peeple in the financial inclusion space.
According to EFInA, about 36 percent of the adult population, precisely 38 billion citizen’s do not have opportunity to financial services in Nigeria.
Segun Ogunsanya, CEO, Airtel Africa said that;
I’m very pleased that SmartCash has been given approval in principle to operate a service bank Business in Nigeria. We will now work closely with the CBN to meet all it’s conditions to receive operating license and commence operation. The final operating license will enable to expand our digital financial products and reach millions of Nigerians that do not have access to traditional financial services. I’m looking forward to work closely with the government, the Central Bank and traditional financial institution to expand financial inclusion and meet the evolving needs of our customers and the economy.

Uto Ukpanah, MTN Nigeria Secretary said,

MTN Nigeria experience optimisms that it would eventually get the PSB license, and reaffirmed its commitment to the financial inclusion agenda of the CBN in Nigeria.

What does these means?

The approval-in-principle required both Telecommunication companies to meet some certain conditions before they can be given final operating license.

A notable advantage of the final operating license will enable the companies to issue debit card and prepaid cards for use across e-banking channels, in-which less sophisticated street stop doesn’t have this kind of priviledge.

 

What can Payment Service Banks Operator do (their advantages and benefits)?

According to the Central Bank of Nigeria (CBN), the PSBs can do the followings:
  1. Accept deposits from individual and Merchants, which will be managed by deposit insurance scheme ( such as Nigeria Deposit Insurance Corporation NDIC).
  2. Carryout Payments and Remittance ( both within and cross-border) via any means in Nigeria.
  3. Sales of Foreign Currencies realized through inbound cross-border payment or remittance.
  4. Issues debit or prepaid card on its name
  5. Operate Electronic and Online Wallets
  6. Invest in FGN and CBN security
  7. Other permission will be announced by CBN from time to time.

What PSBs Can’t do?

Payment Service Bank operators are not enable to perform the following;
  1. They are not permitted to grant any form of loan, advance or guarantee (directly or indirectly).
  2. They are not enabled to accept any foreign currency deposit
  3. Except for carrying out foreign payment and Remittance, PSBs are not allowed to to deal with any foreign exchange market.
  4. Insurance underwriting is not also permitted
  5. Payment Service Banks will not accept any closed scheme value as a form of deposit or payment (eg. Airtime).
In 2020, the Central Bank of Nigeria granted license to Money Master PSB, a subsidiary of Glo and  9PSB of 9Mobile.

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