MTN Nigeria, the leading telecommunications company in the country, has recently applied for Payment Service Solutions Provider (PSSP) and Payment Terminal Service Provider (PTSP) licenses for its fintech subsidiary, MoMo PSB. This move signifies MTN’s increased focus on digital payments within Nigeria.
With the PSSP license, MoMo PSB will have the capability to offer payment processing gateways, develop financial solutions, and provide merchant aggregation and collection services. This license will allow MTN to process payments internally, reducing reliance on external PSSPs and cutting down on costs. Additionally, MoMo PSB will be able to handle payment processing requirements for merchants and partners, enhancing its overall service offerings.
On the other hand, the PTSP license will enable MoMo PSB to deploy and service POS terminals, create POS applications, and provide training and support to over 302,000 merchants, agents, and 5.3 million users on the MoMo PSB platform.
This strategic move by MTN positions its fintech division as a direct competitor to established platforms like Interswitch and Flutterwave. In the PoS market, MoMo PSB will compete with key players such as Moniepoint, Opay, and Palmpay.
MTN’s fintech subsidiary, Yello Digital Financial Services (YDFS), took the lead in applying for these licenses, with a reported payment of ₦200 million as indicated in MTN’s Q3 2024 report. MTN Nigeria has refrained from commenting on the application process.
YDFS was initially launched in 2018 with a super-agent license, allowing it to facilitate bill payments and person-to-person money transfers. However, this license restricted YDFS from holding customer funds in digital wallets. In 2022, MTN introduced MoMo PSB under a Payment Service Bank (PSB) license, offering services like airtime and data sales, bill payments, and money transfers. However, the PSB license limits MoMo PSB from providing services such as lending, foreign currency transactions, and insurance underwriting.
In Nigeria, obtaining a payment service provider license typically involves a ₦100,000 application fee, followed by a ₦100 million licensing fee upon final approval. By the end of Q2 2024, MoMo PSB had recorded 5.5 million active digital wallets and maintained a network of 302,800 agents and merchants.
This strategic move by MTN showcases its commitment to expanding its fintech offerings and catering to the evolving digital payment landscape in Nigeria. The competition in the fintech sector is expected to intensify as established players and new entrants vie for market share in this rapidly growing industry.
