Just like MTN Mobile Money in Uganda and Airtel Mobile Money in Kenya, the Central Bank of Nigeria has given permission to both Telecommunication company to do the same in Nigeria.
The Telecommunication company got approval-in-principle to operate payment service bank (PSB) in the country, ” two years after they approach the regulatory for license.” This information was disclosed by both companies in the regulatory filing on the Nigeria Exchange Limited (NGX) on Friday.
What is Payment Service Bank (PSB)?
I’m very pleased that SmartCash has been given approval in principle to operate a service bank Business in Nigeria. We will now work closely with the CBN to meet all it’s conditions to receive operating license and commence operation. The final operating license will enable to expand our digital financial products and reach millions of Nigerians that do not have access to traditional financial services. I’m looking forward to work closely with the government, the Central Bank and traditional financial institution to expand financial inclusion and meet the evolving needs of our customers and the economy.
Uto Ukpanah, MTN Nigeria Secretary said,
MTN Nigeria experience optimisms that it would eventually get the PSB license, and reaffirmed its commitment to the financial inclusion agenda of the CBN in Nigeria.
What does these means?
The approval-in-principle required both Telecommunication companies to meet some certain conditions before they can be given final operating license.
A notable advantage of the final operating license will enable the companies to issue debit card and prepaid cards for use across e-banking channels, in-which less sophisticated street stop doesn’t have this kind of priviledge.
What can Payment Service Banks Operator do (their advantages and benefits)?
- Accept deposits from individual and Merchants, which will be managed by deposit insurance scheme ( such as Nigeria Deposit Insurance Corporation NDIC).
- Carryout Payments and Remittance ( both within and cross-border) via any means in Nigeria.
- Sales of Foreign Currencies realized through inbound cross-border payment or remittance.
- Issues debit or prepaid card on its name
- Operate Electronic and Online Wallets
- Invest in FGN and CBN security
- Other permission will be announced by CBN from time to time.
What PSBs Can’t do?
- They are not permitted to grant any form of loan, advance or guarantee (directly or indirectly).
- They are not enabled to accept any foreign currency deposit
- Except for carrying out foreign payment and Remittance, PSBs are not allowed to to deal with any foreign exchange market.
- Insurance underwriting is not also permitted
- Payment Service Banks will not accept any closed scheme value as a form of deposit or payment (eg. Airtime).
