Telco Giant, MTN, Gets Final Nod to Start Banking in Nigeria

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 Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term service bank (PSB).

With the approval, MTN Nigeria, the largest mobile telecoms operator in Nigeria, can now run its affiliate, the Momo Payment Service Bank Limited (Momo PSB).

MTN Nigeria's Company Secretary, Uto Ukpanah, announced the sanction on Monday in a press statement obtained by Finance Magnates.

The final go-ahead order follows an approval in principle (AIP) granted in November last year by the Nigerian apex monetary authority.

However, the telecom giant did not disclose when it will kick off the operation of Momo PSB in the country.

MTN wrote: "MTN Nigeria Communications PLC (MTN Nigeria) announces the receipt of a letter dated 8 April 2022 from the CBN addressed to Momo PSB conveying final approval to commence operations.

"The date of commencement will be communicated with the CBN in accordance with its requirements."

Additionally, MTN Nigeria stated that it remains committed to the financial inclusion agenda of the CBN and the country.

Momo's Modus Operandi

According to the CBN's Guidelines for the Licensing and Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term of Payment Service Banks (PSBs) in Nigeria, payment service providers in the country are to "operate mostly in the rural areas and unbanked locations targeting financially excluded persons."

They are also expected to have no less than 25% financial service touch points (locally called kiosks) in these rural areas.

In addition, PSBs are authorized to deploy Point of Sale devices and Automated Teller Machines in some of these areas, and they can use other channels, including electronic platforms, to reach their customers.

Moreover, the service providers are allowed to accept deposits from individuals and small businesses as well as being able to carry out payments and remittances (including inbound cross-border personal remittances) through various channels within Nigeria.

Furthermore, they can sell foreign currencies realized from inbound cross remittances to authorized foreign exchange dealers in the country.

However, they are barred from granting any form of loans, advances and guarantees (directly or indirectly), or accepting foreign currency deposits.

Among other things, payment service banks are also not to deal in the foreign exchange market.

A New Market Contender in Town

The entrance of MTN Nigeria, a telco that boasts of connecting approximately 69 million people across Nigeria to each other, means tougher market competition for Nigeria's struggling banking industry.

According to Nigerian local media, Premium Times, Guaranty Trust Holding Company, the parent company of Guaranty Trust Bank (GTBank), a local Nigerian bank, saw its net profit for 2021 dive to a four-year low.

The holding's turnover slid 1.6 per cent to N447.8 billion from N455.2 billion, according to issued audited financial statements seen by the outlet.

Local counterpart to GTBank, the United Bank for Africa (UBA), a Nigerian pan-African financial services group, recorded a slight rise of 4.3% in annual profit, the outlet also reported.

Meanwhile, MTN Nigeria's profits for the fiscal year of 2021 shot up 45.5% with its revenue climbing to a record N1.7 trillion.