Banks jittery as MTN, others veer into mobile banking

The recent announcement by telecoms giant, MTN, that it would soon apply for a Payment Service Bank (PSB) licence and launch mobile banking in Nigeria by the second quarter of next year, has set alarm bells ringing at deposit money banks (DMBs) in the country, findings by New Telegraph have shown.

According to industry sources, the MTN announcement, which came in the wake of the Central Bank of Nigeria (CBN)’s release of guidelines on PSBs, would make the business environment, which was already tough for lenders, even tougher. Other telecoms firms, according to information, are also billed to take the plunge.

A senior industry player told New Telegraph’s correspondent last weekend: “With a PSB licence, MTN’s subscriber base of over 50 million clearly gives it an edge over banks.

In fact, most of the major telcos can easily provide most of the services being offered by banks.

This means that retail banking will even become more difficult for most lenders. “Compared with banks, the telcos have a bigger budget and better technical know-how to drive mobile banking. So, banks are going to face more issues when these firms start introducing new financial products.”

New Telegraph, November 26, 2018

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