The Central Bank of Nigeria (CBN) has said it would grant more licences for Payment Service Banks (PSB) but set a minimum capital base of N5billion, which could deter telecoms firms and some other potential new entrants to the digital financial services sector.
The central bank in a circular yesterday said that telecom firms, banking agents, retail chains and postal services could apply for licences to become payment banks. To do so they must set up a separate company for it with a minimum capital of N5 billion and run it as an independent entity from their existing operations. The bank has granted three licences so far to 9PSB, a unit of local telecom firm, 9mobile, and two others.
The apex bank said in its circular that it could ask payment banks to recapitalise for specific risks. Payment banks should operate mostly in rural areas and unbanked locations, accepting deposits from individuals and small businesses, the central bank said. They cannot grant loans, it said.
Speaking on the vision of 9PSB’s entrant into the Nigerian financial sector, the CEO of 9mobile, Mr. Alan Sinfield, stated that there’s a huge potential in the market and 9PSB is strategically positioned to expand its operations into financial services. He stated that “We are happy to be the first Payment Service Bank to provide all Nigerians with access to banking services and open up a digital world of possibilities to improve everyday lives. We know that this new development will further improve the country and the people going forward. In 2018, 9mobile partnered with Nigerian bank, UBA to roll out 9Pay, a mobile payments solution
while also pushing for a fintech license. We are delighted that we have now secured finale approval for a Payment Service Bank.”
In his own reaction, the CFO of 9mobile, Mr. Phillips Oki stated that “the financial inclusion that 9PSB will provide will be an enabler to achieving unparalleled benefit in everyday transactions. The *990# allows Nigerians to perform all financial transactions including utilities payment from the comfort of their phones and homes on any mobile network at no charge. With a large network of agents strategically located in both urban and rural communities, 9PSB is going to make sending and receiving money possible, easier, seamless and less stressful for all Nigerians.