After getting permit to begin Telecom services, Nigerian company moves to get banking license

One of Nigeria’s top financial technology firms, Interswitch, has merged with M-Kudi, a mobile money service provider, as it intensifies efforts to secure a payment service bank (PSB) license from the Central Bank of Nigeria (CBN).

The merger, pending approvals, will allow Interswitch to create accounts and hold customer deposits, which will be the first time the fintech firm will offer non-payment services.

According to reports, Interswitch will be able to receive foreign currencies for its customers and directly offer agency banking services.

Analysts believe the company will be fine convincing the Nigerian banking public to use its remittance or agency banking services, stating that the company, whose presence is deeply rooted in Nigeria, will compete with top players in the industry.

CBN introduced rules for payment service banks in 2018 to increase financial inclusion in the country. The payment service bank holders are expected to offer 25% of physical activity in rural areas with a high unbanked population.

The company derives its earnings from offering payment services to its banking customers and will have to invest in a nationwide network of agents.

Per the CBN regulations, mobile money operators are restricted from participating in the revenue-driving segments of other banks as they can not offer loans, hold Forex deposits, or participate in foreign exchange transactions except receiving remittances.