As reported by Techcabal, MTN Nigeria, the country’s leading telecommunications provider, has applied for two new licenses—Payment Service Solutions Provider (PSSP) and Payment Terminal Service Provider (PTSP)—for its fintech subsidiary, MoMo Payment Service Bank (MoMo PSB), signaling a strategic expansion in digital payments. With these licenses, MTN aims to deepen its footprint in Nigeria’s financial technology space, focusing on payment processing and merchant solutions.
A PSSP license will allow MoMo PSB to operate payment gateways, develop specialized financial solutions, and offer merchant aggregation services. By obtaining this license, MTN can streamline its internal payment processing, minimizing its reliance on third-party PSSPs and thereby reducing associated costs. This license also enables MoMo PSB to serve the payment needs of merchants and business partners, effectively positioning MTN as a direct competitor to established players like Interswitch and Flutterwave.
The PTSP license, on the other hand, will allow MoMo PSB to deploy and maintain point-of-sale (POS) terminals, create POS applications, and offer training and support services. This expansion will support MoMo PSB’s network of over 302,000 agents and merchants, as well as 5.3 million customers on the platform. In the POS space, MoMo PSB will enter the market alongside key players such as Moniepoint, Opay, and Palmpay.
MTN’s other fintech subsidiary, Yello Digital Financial Services (YDFS), handled the application process, reportedly paying a total of ₦200 million for the licenses according to MTN’s Q3 2024 report. MTN has not commented publicly on the applications.
Launched in 2018, YDFS initially held a super-agent license, allowing it to facilitate bill payments and peer-to-peer transfers but preventing it from holding customer deposits in digital wallets. In 2022, MTN introduced MoMo PSB with a Payment Service Bank (PSB) license, which enables basic banking services such as airtime sales, bill payments, and money transfers. However, this PSB license prohibits MoMo PSB from offering services like lending, foreign currency transactions, and insurance underwriting.
In Nigeria, a payment service provider license requires a ₦100,000 application fee, followed by a ₦100 million licensing fee upon final approval. As of Q2 2024, MoMo PSB had reported 5.5 million active digital wallets and a network of over 302,800 agents and merchants, underscoring MTN’s growing influence in the digital finance sector.
