Two weeks ago, the Central Bank of Nigeria (CBN) gave approvals in principle (AIP) to two of Nigeria's most prominent telecommunication companies—MTN and Airtel. With these AIPs, the subsidiaries of these telcos—MoMo and Smartcash—became Payment Service Banks (PSBs).
What's interesting is that PSBs are not new in Nigeria. At least three PSBs were operational until the first week of November 2021. Yet, the two latest CBN approvals have elicited some excitement—probably dread and uncertainty—within some financial institutions.
Let's look at two reasons driving the excitement behind the approvals. The first is that these new licenses are for subsidiaries of Nigeria's largest and most efficient telecommunication operators—MTN