MTN Nigeria, the country’s largest telecommunications provider, has applied for Payment Service Solutions Provider (PSSP) and Payment Terminal Service Provider (PTSP) licenses for its fintech subsidiary, MoMo PSB, signalling its increasing focus on digital payments in Nigeria.
With the PSSP license, MoMo PSB would be authorised to provide payment processing gateways, develop financial solutions, and offer merchant aggregation and collection services. This license would allow MTN to handle its payment processing needs directly, potentially reducing expenses currently paid to third-party PSSP providers. Beyond meeting its internal payment requirements, MoMo PSB could also extend payment processing services to merchants and partners.
The PTSP license would empower MoMo PSB to deploy and manage POS terminals, develop POS applications, and offer training and support to its extensive network of over 302,000 merchants, agents, and more than 5.3 million users on the MoMo PSB platform.
These licenses would position MTN’s fintech arm as a direct competitor to established payment processing platforms like Interswitch and Flutterwave. In the POS market, MoMo PSB would face competition from industry leaders such as Moniepoint, Opay, and Palmpay.
According to MTN’s Q3 2024 report, its other fintech subsidiary, Yello Digital Financial Services (YDFS), applied for these licenses, paying approximately $261,000 for the applications.
MTN Nigeria declined to comment on the application status.
MTN initially launched YDFS in 2018, obtaining a super agent license to enable bill payments and person-to-person transfers. However, this license restricted YDFS from holding customer deposits in digital wallets.
In 2022, MTN introduced MoMo PSB, which operates under a Payment Service Bank (PSB) license, allowing it to provide services like airtime and data sales, bill payments, and money transfers. However, this license excludes MoMo PSB from offering lending, foreign currency transactions, and insurance services.
In Nigeria, the cost of obtaining a payment service provider license typically includes a $130 application fee plus an additional $130,000 licensing fee upon final approval.
As of the end of Q2 2024, MoMo PSB reported 5.5 million active digital wallets and a network of 302,800 agents and merchants.
