MOMO Comes into town for MTN. Five months after it received an AIP(Approval In Principle) from CBN, MTN Nigeria, the Nigerian division of the MTN Group, a South African multinational mobile telecommunications company, has received final approval from the Central Bank of Nigeria (CBN) to operate its payments service bank (PSB).
- Five months after it received an AIP(Approval In Principle) from CBN, MTN Nigeria, the Nigerian division of the MTN Group,...
- MTN Nigeria announced receiving the approval letter dated 8 April 2022 from CBN(Central Bank of Nigeria), conveying final approval to...
- According to NFIS(National Financial Inclusion Strategy), financial inclusion is achieved when adult Nigerians have easy access to a broad range...
- Read Also: Orange Egypt Adds VISA To its Mobile Money Services This is very important to facilitate Cash-in and Cash-out (CICO)...
Keep reading for the full breakdown on CBN — everything you need to know is covered below.
MTN Nigeria announced receiving the approval letter dated 8 April 2022 from CBN(Central Bank of Nigeria), conveying final approval to commence PSB operations.
In 2018, the Central Bank gave the first indication that it would allow non-financial companies to apply for mobile banking licenses, either as Payment Service Banks (PSBs) or Mobile Money Operators (MMOs).
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Nigeria’s four major mobile networks have payment service bank (PSB) subsidiaries. 9mobile has 9PSB Limited; Airtel Africa has Smartcash PSB Limited; Globacom Limited has MoneyMaster PSB Limited, and MTN Nigeria has MOMO PSB Limited.
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Financial inclusion
The principal aim of PSB in Nigeria is financial inclusion.
According to NFIS(National Financial Inclusion Strategy), financial inclusion is achieved when adult Nigerians have easy access to a broad range of formal financial services that meet their needs at affordable costs.
CBN’s Expectations From Payment Service Bank’s ( PSB )
PSBs are expected to have lower servicing costs. This is because the profitability of PSBs is expected to be highly sensitive to transaction volumes and gaining a critical mass of customers.
PSBs are expected to roll out sustainable access points. As a result, MOMO is expected to have no less than 25% financial service touch points (locally called kiosks) in rural areas.
One of the critical financial inclusion objectives is to increase the number of financial access points.
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This is very important to facilitate Cash-in and Cash-out (CICO) for customers, especially at rural and semi-rural areas of Nigeria. Therefore, achieving a reasonable customer-to-access point ratio is a critical determinant of customer enrolment and transaction acquisition.
What MOMO Can And Can Not Do Based on Terms of Their Operational License
Can Accept Deposit
As a payment service bank, MOMO is permitted to accept deposits from individuals and small businesses and effect payments and remittances (including inbound cross-border personal remittances) through various channels within Nigeria.
Can Deploy POS and ATM Machines
MOMO is authorized to deploy Point of Sale devices and Automated Teller Machines and they can reach their customers through electronic platforms.
Can Sell Foreign Currencies
They also have clearance to sell foreign currencies realized from inbound cross remittances to authorized foreign exchange dealers in Nigeria.
Can’t Grant Loans or Accept Foreign Currency Deposits
They are barred from granting any form of loans, advances, and guarantees (directly or indirectly), or accepting foreign currency deposits.
Not Permitted To Deal In The Foreign Exchange Market
Mono operational licenses do not permit them to deal in the foreign exchange market.
What They Are Saying About MONO Intentions
“We want to leverage the financial inclusion drive. We plan to give people who don’t have bank accounts or even ATM cards the opportunity to be able to do banking services,” a top official of MTN Group whose identity is withheld as requested by him, told Premium Times. “And we are leveraging on our size. When we have subscribers of over 70 million spread across Nigeria with our infrastructural spread, we are well-positioned to cover everywhere. That’s exactly what we want to achieve.” He added.
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MTN Nigeria gave no date for MOMO launch stating that “The date of commencement will be communicated with the CBN in accordance with its requirements.”
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