MTN Nigeria, the country’s biggest telco, has applied for Payment Service Solutions Provider (PSSP) and Payment Terminal Service Provider (PTSP) licences for its fintech subsidiary MoMo PSB, reflecting its growing focus on digital payments in Nigeria.

The PSSP license allows MoMo PSB to offer payment processing gateways, develop financial solutions, and provide merchant aggregation and collection services. With a PSSP license, MTN can process its payments, reducing what it currently pays to other PSSPs. Beyond fixing the internal payment needs of the telco business, MoMo PSB can also address the payment processing needs of merchants and partners.

The PTSP license will allow MoMo PSB to deploy and service POS terminals, develop POS applications, and offer training and support to over 302,000 merchants, agents, and 5.3 million users on the MoMo PSB platform.

These new licenses put MTN’s fintech arm in direct competition with established platforms like Interswitch and Flutterwave. In the PoS market, MoMo PSB will be competing with leaders such as Moniepoint, Opay, and Palmpay.

MTN’s other fintech subsidiary, Yello Digital Financial Services (YDFS), applied for the licenses and paid ₦200 million for them, according to the company’s Q3 2024 report.

MTN Nigeria declined to comment on the applications.

MTN launched YDFS in 2018, with a super-agent licence to facilitate bill payments and person-to-person transfers. However, this license restricted YDFS from holding customer deposits in digital wallets.

In 2022, MTN launched MoMo PSB with a Payment Service Bank (PSB) license, offering services such as airtime and data sales, bill payments, and money transfers. The PSB license still limits MoMo PSB’s offerings, excluding services like lending, foreign currency transactions, and insurance underwriting.

In Nigeria, acquiring a payment service provider license generally includes a ₦100,000 application fee, plus an additional ₦100 million license fee once the final approval is issued.

By the end of Q2 2024, MoMo PSB reported 5.5 million active digital wallets and 302,800 agents and merchants.