MTN Nigeria, the largest telecommunications company in the country, has submitted applications for Payment Service Solutions Provider (PSSP) and Payment Terminal Service Provider (PTSP) licenses for its financial technology subsidiary MoMo PSB, indicating a heightened focus on digital payments within Nigeria.
The PSSP license enables MoMo PSB to offer payment processing gateways, develop financial solutions, and provide merchant aggregation and collection services. This license allows MTN to handle its payments internally, thereby reducing costs paid to other PSSPs. In addition to meeting the telco business’s payment needs, MoMo PSB can cater to merchants and partners’ payment processing requirements.
The PTSP license will empower MoMo PSB to deploy and maintain 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.
These new licenses position MTN’s fintech arm in direct competition with established platforms like Interswitch and Flutterwave. In the POS market, MoMo PSB will compete with leaders such as Moniepoint, Opay, and Palmpay.
MTN’s other fintech subsidiary, Yello Digital Financial Services (YDFS), applied for the licenses and paid ₦200 million for them, according to the company’s Q3 2024 report.
MTN Nigeria chose not to provide a statement regarding the applications.
In 2018, MTN launched YDFS with a super-agent license to facilitate bill payments and person-to-person transfers. However, this license prevented YDFS from holding customer deposits in digital wallets.
In 2022, MoMo PSB was introduced by MTN with a Payment Service Bank (PSB) license, offering services like airtime and data sales, bill payments, and money transfers. While the PSB license has limitations on offerings such as lending, foreign currency transactions, and insurance underwriting.
In Nigeria, obtaining a payment service provider license typically involves a ₦100,000 application fee, along with an additional ₦100 million license fee upon final approval.
By the end of Q2 2024, MoMo PSB had reported 5.5 million active digital wallets and 302,800 agents and merchants.