MTN Nigeria has taken a significant step in expanding its footprint in Nigeria’s digital payments ecosystem by applying for two crucial licences—Payment Service Solutions Provider (PSSP) and Payment Terminal Service Provider (PTSP)—for its fintech arm, MoMo Payment Service Bank (MoMo PSB).
With these licences, MTN aims to simplify payment processing within MoMo PSB while enhancing its competitiveness against established financial platforms and boosting its influence in Nigeria’s rapidly growing digital finance landscape.
The PSSP licence would enable MoMo PSB to manage payment gateways, offer merchant aggregation services, and develop other digital financial tools. This move is expected to streamline MTN’s own payment operations, reduce reliance on external payment processors, and expand its capacity to serve third-party merchants and partners directly.
The PTSP licence would empower MoMo PSB to deploy and maintain point-of-sale (PoS) terminals across Nigeria, targeting small and medium-sized businesses. This would reinforce its existing network, which currently includes over 302,000 merchants and agents and serves a customer base of approximately 5.3 million users.
These licences position MoMo PSB to challenge key players like Interswitch and Flutterwave in payment processing. Meanwhile, in the PoS market, it will compete directly with Moniepoint, Opay, and Palmpay, all of which are established brands in Nigeria’s burgeoning PoS segment.
MTN Nigeria’s foray into fintech started in 2018 with the launch of Yello Digital Financial Services (YDFS), initially limited to bill payments and money transfers under a super-agent licence that prohibited holding customer funds. In 2022, MTN introduced MoMo PSB under a Payment Service Bank licence, allowing it to offer money transfers, airtime sales, and bill payments. However, this licence still restricts MoMo PSB from providing lending services or foreign currency transactions.
As part of the application process for the new licences, MTN disclosed a payment of ₦200 million in its third-quarter financial report for 2024. According to Nigerian regulations, the process requires a ₦100,000 initial application fee and a ₦100 million licence fee upon final approval.
By acquiring these licences, MTN aims to solidify MoMo PSB’s role in Nigeria’s financial industry, offering a broader array of payment services and reinforcing its competitive stance in the market. As of the second quarter of 2024, MoMo PSB had already attracted 5.5 million active wallets and built a vast network of 302,800 agents and merchants, underscoring its rapid growth and ambition within the fintech sector.
