MTN seeks additional payment licenses for MoMo

• Published On: 05 November 2024 at 18:57

MTN Nigeria has applied for Payment Service Solutions Provider and Payment Terminal Service Provider licenses for its fintech subsidiary, MoMo Payment Service Bank, indicating an increased emphasis on digital payments in Nigeria.

MoMo PSB will be able to operate payment gateways, develop financial solutions, and offer merchant aggregation and payment collection services once it has a PSSP license. This move would allow MTN to process its own payments in-house, reducing its current reliance on third-party PSSPs and cutting transaction costs.

MoMo PSB would also be able to process payments for merchants and partners, thereby expanding its role in Nigeria's payment ecosystem.

MoMo PSB's PTSP license will enable it to deploy and service POS terminals, develop POS applications, and support and train its expanding network of merchants and agents. MoMo PSB currently employs over 302,000 agents and merchants and serves over 5.3 million customers.

These new licenses allow MTN's fintech arm to compete directly with established payment processing players such as Interswitch and Flutterwave, as well as POS providers Moniepoint, Opay, and Palmpay.

MTN's fintech subsidiary, Yello Digital Financial Services (YDFS), applied for the licenses on behalf of MoMo PSB. In its Q3 2024 report, the company confirmed a ₦200 million payment to cover the licensing fees.

MTN initially launched YDFS in 2018 with a super-agent license, allowing bill payments and person-to-person transfers but limiting customer deposits. In 2022, MTN launched MoMo PSB, which has a Payment Service Bank (PSB) license and can sell airtime and data, pay bills, and transfer money.

However, the PSB license prohibits MoMo PSB from offering services such as lending, foreign exchange, or insurance underwriting.

Obtaining a payment service provider license in Nigeria usually requires a ₦100,000 application fee and an additional ₦100 million upon final approval.

By the end of Q2 2024, MoMo PSB had 5.5 million active digital wallets and a network of 302,800 agents and merchants, demonstrating its rapid growth and strategic position in Nigeria's fintech ecosystem.