Saturday, October 1, 2022
Published 2 Years Ago on Tuesday, Sep 01 2020 By Ranine Awwad
Payment Service Banks are a new category of banks that function with smaller-scale operations. Nigeria’s Central Bank announced that it would grant more licenses for Payment Service Banks within a minimum capital base of $13 million. This move could have impacts on telecom services and other companies who have expressed interest in digital financial services, according to CGTN Africa.
On August 31, 2020, the Central Bank said in a circular that telecom firms, banking agents, retail chains, and postal services are eligible for this service. However, they have to establish a new company with a minimum capital of $13 million. On the other hand, the Central Bank has granted licenses to 9PSB, 9mobile, and two others.
Nigeria wants to secure digital financial services for more than half the Nigerian population that does not have a bank account. The service is expected to operate in rural areas and unbanked locations. Back in 2019, Nigeria’s biggest telecom firm MTN launched a mobile money transfer service.
On August 28, 2020, The Central Bank of Nigeria announced on twitter that it has approved final licenses to three Payment Service Banks: Hope PSB, Moneymaster PSB, and 9PSB. This move comes as part of CBN’s commitment to the implementation of policies that will engender a diverse financial system that meets the needs of all stakeholders, according to the tweet. Back to December 2019, Nigerian Central Bank CBN issued licenses for 15 mobile money operators aiming to facilitate access to mobile money services for Nigerians who do not have bank accounts.
“The super agents are expected to complement the efforts of the MMOs and banks, by hiring and managing sub-agents and extending financial services to the unbanked at minimal cost, said CBN Governor Godwin Emefiele, according to Punch. Moreover, he added, “The super agents are expected to be effective at extending the reach to locations where bank branches may not be available.”
Back in 2018, Nigerian telecom companies disputed the Central Bank guidelines for Payment Banks. Telecom operators said that there is no need for capital as they are not banks. On August 27, 2020, CBN revised the guidelines for the licensing and regulation of payment service banks in Nigeria. “The update and review of the Guidelines for Payment Service Banks were in response to market developments since 2018”, according to the CBN twitter account.
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