The Central Bank of Nigeria, CBN, has granted permits to MTN Nigeria Communication Plc, MTN Nigeria, and Airtel Africa Plc to operate payment service banks, Nigeria’s biggest two telecom firms said on Friday, more than two years after they approached the regulator for licensing.
By these approvals, MTNN’s payment unit known by Momo Payment Service Bank Limited and Airtel’s SMARTCASH Payment Service Bank Limited, can now facilitate deposit acceptance and withdrawal services from persons and small businesses and also execute payment and remittance on customers’ behalf within Nigeria.
This is however, subject to laid out requirements to be met by MTN and Airtel.
When put in full operation, the permit will enable MTN and Airtel to issue debit and prepaid cards for use across e-banking channels, which does not have a place in the less sophisticated agency banking largely operated by street shops.
Also, it empowers MTN and Airtel to offer most banking services apart from lending and receiving deposits in foreign currency, a paradigm shift that shares the space with traditional deposit money ban, DMBs. And could redefine banking in Africa’s largest economy and open up the industry to greater competition.
On the strength of the approvals, MTNN and Airtel are likely to fight for dominance in the fintech service domain, presently unchallenged to lenders who occupy it.
“The final operating licence will enable us to expand our digital financial products and reach the millions of Nigerians that do not have access to traditional financial services,” Airtel CEO Segun Ogunsanya said, hinting at the drive to gain potential markets like rural areas, which conventional banks may lack the capacity to penetrate.