MTN Nigeria through its subsidiary, Yello Digital Financial Services (YDFS) Limited has gotten the nod from the Central Bank of Nigeria to launch a mobile payment service. The telco made this known on Monday, July 29 after being awarded a license. This makes MTN the first telecommunication company to get the license in Nigeria.
“Through the network established by YDFS, MTN is in a position to broaden the availability of financial services for the under-served across the country. This marks a very important first step in leveraging our infrastructure to scale our Fintech initiatives,” MTN Nigeria’s CEO Ferdi Moolman said in a statement.
The company seems to have more interest in Nigeria despite a history of billion-dollar fine. The company will be banking on its customer base and market shares for the success of the business. It would be recalled that last year MTN successfully launched a historic IPO in Ghana through its mobile money. This IPO which showed the far-reaching potential of Mobile Money in Africa, saw 84.6 percent of local applicants in Ghana buy the shares through their MOMO wallet.
Without being specific, Moolman said, “we have also applied for a Payment Service Bank Licence, which will enable us in time to offer a broader and deeper range of financial services to those communities and we remain hopeful we will receive approval shortly.”
Apart from MTN, there is a huge possibility that other telecommunications company will be applying for the same license. This service will be beneficial to a lot of Nigerians most especially those in the rural areas where there are no banks or don’t own bank accounts. Currently, over 90 million Nigerians are unbanked Nigeria, this means that a major part of the population don’t have bank accounts or don’t use financial institutions to save and borrow money.
Meanwhile, in East Africa where Mobile money started, the service has become part of their everyday payment and transaction. Due to its peculiarity, both the government of Kenya and regulators have taken interest in the service. This is because at a point people were confused about whether Safaricom’s MPESA was a banking business or telecommunication money transfer company. Currently, there is a seemingly endless battle between the Central Bank of Kenya, regulators and Safaricom, owners of MPESA to compel the latter to separate and de-link their main businesses from “other innovative” subsidiaries.
MTN Nigeria listed on the Nigerian Stock Market in May and the 2 trillion naira ($6.54 billion) debut turned the company’s stock into NSE’s second-largest stock by market value.
In the company’s unaudited financial report for the first six months of this year, the company reported that it generated N359bn revenue from the sale of airtime and subscription, N103.3bn from data services and N7.05bn from SMS.