Ahead of the launch of its payment service bank (PSB), MTN Nigeria says it has seen the number of active subscribers on its fintech platform rise by 6.2 million to 10.7 million people year-on-year.
The telecommunication company (telco) said it added 1.3 million fintech subscribers and 166,000 active mobile money (MoMo) agents in the first three months of 2022.
“Our existing MoMo business provides a solid foundation for launching MoMo PSB and driving digital and financial inclusion in Nigeria.” Karl Toriola, CEO of MTN Nigeria, said.
A 10.7 million user base is expected to give MTN an advantage ahead of its launch of the PSB and ensure it has a chance of taking the top fintech position from incumbent mobile banking platforms.
Paga, one of the first fintech companies to secure a mobile money licence claims it has 19 million unique users as of April 2022 through its consumer channel and agent network of over 120,000 agents across Nigeria.
Since it began commercial operations in 2012, Paga has processed over $10 billion (N4 trillion).
OPay, as of 2021, says it has over 10 million active users and 300,000 agent networks. Kuda Bank has over 2 million registered users and is not a big player in the agent banking market.
MTN’s fintech users have mostly come from utilising its Super-Agent licence, which it received in August 2019. It would therefore mean that the telco reached its 10.7 million users mark in less than four years. Paga needed about 10 years to hit 19 million whereas Opay took five years to get 10 million users.
Tayo Oviosu, CEO of Paga Group, said in April that MTN MoMo was dominating in Kenya and Ghana. In these countries, Oviosu said the dominance of telcos in mobile banking was due to poor banking infrastructure. Nigeria however, has a robust banking infrastructure with players that have aggressively embraced banking innovation.
“Get ready for a marketing blitz,” Oviosu said.
In Ghana, MoMo is the dominant banking service with 11.7 million active users as of the first quarter of 2022. That means at least one in every Ghanaian is using MoMo. However, MoMo is battling a 1.75 percent e-levy charge that has seen it increase the fees for transactions in Ghana.
Experts say it is possible for MTN to replicate the success in Nigeria. It currently has 74.9 million voice subscribers and 59.9 million data subscribers.
As at 25 April 2022, approximately 60 million subscribers have submitted their NINs, representing about 85 percent of MTN’s subscriber base. The telco’s ability to convert at least half of the NIN base gives it the market leadership.
“Many of the existing players are overwhelmed with the sheer volumes and there are centralized dependencies that don’t help the matter. I believe MTN PSB will be massively successful not just because MTN is better than others but because MTN itself needs it. #1 merchant is MTN,” Victor Asemota, a tech investor said.
MTN may also have another advantage with the conclusion of the first phase of a series of transactions to increase Nigerian ownership in MTN Nigeria. The exercise brought in 126,720 retail businesses as shareholders of the company. As at 31 March 2022, the number of retail shareholders had increased to approximately 139,000, MTN can quickly leverage the advantage in bringing MoMo services.
“We will continue executing our strategy to deliver service revenue growth in line with medium-term guidance. We continue to focus on driving operating leverage and extracting efficiencies to support earnings, cash flow growth and returns over the medium term,” Toriola said.