Telecoms giant MTN Nigeria is to acquire a Payment Service Bank (PSB) licence allowing millions of its customers to carry out digital banking across its networks and those of other PSB agents in the country. MTN’s announcement is expected to ignite a PSB licence rush by other telcos notably 9mobile, Airtel, and Globacom.
Chief Executive Officer, MTN Group, Rob Shuter, at the on-going AfriCom event in Cape Town, South Africa, said the group will be finalising its acquisition of a PSB licence between next month and first quarter of 2019.
“We will be applying for a payment service banking licence in Nigeria in the next month or so. If all goes according to plan, we will also be launching mobile money in Nigeria probably around Q2 of 2019,” said Shuter at the three day telecom event that ends tomorrow.
PSBs are designed by the Central Bank of Nigeria (CBN) to facilitate high-volume low-value transactions in remittances services, micro-savings and withdrawal services in a secured technology-driven environment to further deepen financial inclusion.
The CBN released guidelines for payment service banks last October. The draft guidelines provide that the founders of a PSB shall be banking agents, telecommunication companies (telcos) through a subsidiary, retail chains (supermarkets), and mobile money operators (MMO).
Application licence to be a PSB is N2 million while the paid-up share capital of the PSB shall be N5 billion. PSB will not be allowed to grant loans, advances, guarantees or underwrite insurances, according to the CBN.
PSBs are to operate as digital banks able to receive and transfer cash between individuals and small businesses and also able to maintain savings accounts. The tech-driven services will allow speedy payments for goods and services. It targets both urban and rural users in a way that is able to accelerate the CBN’s target for financial inclusion among Nigeria’s large unbanked population.
Under the guidelines, PSBs will be allowed to issue electronic wallets, debit and pre-funded cards, and electronically make payments/remit cash between banks for services rendered, as it will be connected or utilize a corresponding bank which is connected to Nigeria Inter-Bank Settlement System (NIBSS).