The Central Bank of Nigeria has approved the operations of about five Payment Service Banks (PSBs) in Nigeria
Four of the banks are operated by telephone companies to enhance mobile money access in Nigeria
These PSBs can receive deposits and offer remittance services but are limited in scale
The Central Bank of Nigeria (CBN) has licensed Payment Service Banks (PSBs) to drive financial inclusion in Nigeria.
According to CBN, the need to bring in more Nigerians and the financially excluded into the banking network is the driving force behind the licensing of this special banking segment.
PSBs are empowered to offer payments and remittance services. The immediate participation of telephone companies in Nigeria’s mobile money licensing operations has been delayed since the CBN introduced mobile money in Nigeria.
Taking a cue from India’s Reserve Bank, Nigeria’s apex bank began to explore the introduction of a new bank model known as Payment Service Banks (PSBs) Payment Service Banks are a new banking category with smaller-scale operations, no credit risk, and forex operations.
The banks are empowered to offer payments and remittance services, issue debit and prepaid cards, and deploy ATMs and technology-enhanced banking services.
Telecos’ subsidiaries, such as mobile money operators, and retail chains like supermarkets and banking agents, can operate Payment Service Banks if they meet certain conditions, including N5 billion capital base and a joint N2.5 million non-refundable application and license fee.
The PSBs are not allowed to offer loans or credit facilities to customers but can only receive deposits, meaning they cannot replace deposit money banks.
PSBs are heavily-reliant on technology through financial services and have a robust agent banking model, which reduces overhead costs.
However, CBN began licensing these PSBs to bring banking to the people, especially Nigerians in rural areas.
Here is the list of CBN-approved PSBs in Nigeria
Hope Payment Service Bank
Money Master PSB Limited (Owned by Globacomm)
MoMo Payment Service Bank (Owned by MTN)
9 PSB Limited (owned by 9Mobile)
SmartCash PSB Limited (owned by Airtel)
