MTN Nigeria, the country’s largest telecommunications operator, has applied for a Payment Service Solution Provider (PSSP) and Payment Terminal Service Provider (PTSP) license for its fintech subsidiary MoMo PSB, reflecting the growing interest in digital payments in Nigeria.
The PSSP license allows MoMo PSB to provide payment processing gateways, develop financial solutions, and provide merchant collectithe on and aggregation services.
With the PSSP license, MTN will be able to process its own payments, reducing the amount it currently pays to other PSSPs.
In addition to addressing the internal payment needs of the telecommunications business, MoMo PSB will also be able to meet the payment processing needs of merchants and partners. The PTSP license will allow MoMo PSB to deploy and maintain point-of-sale terminals, develop point-of-sale applications, and provide training and support to over 302,000 merchants, agents, and 5.3 million users.
These new licenses put MTN’s fintech arm in direct competition with established platforms such as 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), has applied for the license and paid N200 million for it, according to the company’s Q3 2024 report. MTN Nigeria declined to comment on the requests.
MTN launched YDFS in 2018, with a super-agent license to facilitate bill payments and person-to-person transfers.
However, the license prohibited YDFS from holding customer deposits in digital wallets.
In 2022, MTN launched MoMo PSB with a Payment Services Bank (PSB) license, providing services such as airtime and data sales, bill payments, and money transfers. The PSB license still limits MoMo PSB’s services, except for services such as lending, foreign exchange transactions, and insurance underwriting.
In Nigeria, applying for a payment service provider license typically involves an application fee of ₦100,000, plus an additional license fee of ₦100 million once final approval is granted.
As of the end of Q2 2024, MoMo PSB reported having 5.5 million active digital wallets and 302,800 agents and merchants.
