Nigeria is one of the forefronts of mobile money-using countries in Africa. But with technological advancements and the emergence of new products, there are several questions ensuing and in this post, we will be answering some of those top questions.
In this blog, we’ll be providing answers to both the complex and simple questions about mobile money operators in Nigeria. This is to help you navigate and understand these financial institutions in Nigeria.
So, if you’ve been curious about mobile money operators in Nigeria, keep reading!
What are Mobile Money Operators?
Mobile Money Operators, also abbreviated as MMOs, are companies that allow you to use your phone to manage your money. They build financial systems that allow you to carry out transactions, among other things.
Although, you would, oftentimes, need a smartphone to have and use a mobile money account. However, you can also have access to MMOs without having a data connection.
How many licensed mobile money operators are there in Nigeria?
According to the Central Bank of Nigeria (CBN), 21 mobile money operators have CBN licenses. The Nigeria Deposit Insurance Corporation (NDIC) has 18 non-bank-led MMOs and 13 bank-led MMOs. Some of these MMOs are Abeg Technologies, Fortis Mobile, KongaPay, FirstMonie, Kegow, etc.
You should also know that not all mobile banking platforms are licensed as MMOs. For instance, the popular Kuda and Moniepoint are not MMOs but microfinance banks.
What is Mobile Money Weakness?
Mobile money operators have several issues and weaknesses but one of them is the lack of agents in rural areas. This makes it rather hard for the mobile money providers to achieve their main goal which is to provide financial inclusion for underbanked and unbanked communities. Another weakness is the lack of trust from customers, especially for savings purposes, among others.
Is OPay a Mobile Money?
The popular Opay is a company licensed by the Central Bank of Nigeria (CBN) to operate fully as a mobile money operator in Nigeria. The company was launched in 2018 and quickly rose to the top, securing the interests of several Nigerians, due to their seamless transactions, low fees, and rewards systems.
Is Moniepoint CBN approved?
Yes, Moniepoint Bank is licensed by the CBN. They were awarded as the most inclusive payment in Nigeria in 2022 by CBN. As against popular opinions that the platform is an MMO, Moniepoint has a license to operate as a microfinance bank. It is a definitive bank for small and medium-sized enterprises, SMEs, in Nigeria which is regulated by CBN.
Is Piggyvest approved by CBN?
Piggyvest isn’t a mobile money operator in Nigeria, although they have a subsidiary that is licensed as an MMO, PocketApp. PiggyVest itself is a financial institution with a license to operate as a microfinance bank in Nigeria. They provide you with a savings and investment platform and your money is insured by the Nigeria Deposit Insurance Corporation (NDIC).
Which bank owns PalmPay?
PalmPay is a financial services provider co-owned by Chinese-based Transsion Holdings and NetEase. Transsion Holdings is a mobile phone manufacturing firm in China. Their subsidiaries are Techno Mobile, Infinix Mobile, and Itel Mobile. PalmPay isn’t owned by a bank but a mobile phone manufacturing firm.
Who regulates mobile money in Nigeria?
The primary regulator for mobile money operators in Nigeria is the Central Bank of Nigeria (CBN). The CBN is the body that defines and issues licenses to Mobile Money Operators (MMOs). They monitor the overall mobile money ecosystem in the country. There are also other players involved:
- The Nigeria Deposit Insurance Corporation (NDIC), isthe body responsible for issuance of deposits.
- The Nigerian Communications Commission (NCC), isresponsible for approving short codes used by MMOs for their mobile services.
- Lastly, MMOs in Nigeria partners with Nigeria Inter-Bank Settlement System Plc (NIBSS),
Does Nigeria do Mobile Money?
Yes, Nigeria does have mobile money services and they’ve seen tremendous growth, hitting an impressive 89% year-on-year growth as of Q1,2024. Mobile mobile operators have an association in Nigeria, AMMBAN.
What is another name for Mobile Money?
Other names that are often used interchangeably with mobile money are wallet (or e-wallet), mobile wallet, mobile bank and some just call them fintech.
While not direct replacements, these terms are used in the context of mobile money transactions in Nigeria.
What are the disadvantages of mobile money?
Even though mobile money has several advantages, there are still some risks, some of which are:
- Fraud: Scammers leverage tactics like SIM swapping and phishing to steal users’ information and withdraw money from mobile money accounts.
- Agent dishonesty: In some cases, mobile money agents, popularly known as POS agents can act dishonestly, by overcharging for transactions or even embezzling funds.
- Network issues: Users still face network issues, sometimes from unreliable mobile network coverage or other bank networks. This can lead to a disruption in the transactions carried out, causing frustration and loss of money for the users.
- Low user awareness: The core unbanked communities are still not familiar with how mobile money works, which can make them more susceptible to fraud or errors.
- Limited dispute resolution: As seen with several MMOs, resolving issues with transactions can sometimes be a challenge.
What is the use of mobile money in Nigeria?
The main objective of mobile money in Nigeria is to provide financial services to unbanked and underbanked communities in the country. This has largely led to individuals, also called agents, making financial services available mostly through PoS machines on the streets and shops.
What is the difference between mobile money and mobile banking?
While both mobile money and mobile banking utilize mobile phones for financial transactions, they differ in their functionality and operations. Mobile money services act as mobile wallets which are completely independent of an existing commercial bank. Whereas, mobile banking is the baking application of an existing commercial bank. Mobile money is for anyone with a phone, promoting financial inclusion, while mobile banking complements your traditional bank account, offering on-the-go convenience.
Also, mobile money lets you send and receive money with the help of a mobile phone and the Internet, while Mobile Banking allows you to carry out banking-related transactions or transfers through a bank app.
How Does the Mobile Money Work?
Mobile money works like a digital ecosystem built around your mobile phone that allows you to conduct financial transactions conveniently. The first stage is creating an account with a mobile money provider (MMO). Most of the time, your phone number and some basic identification documents are all you need. Once verified, you’ll have a mobile money account that is directly linked to your phone number.
Thereafter, you can add funds to your mobile money account. You can easily do this by transferring from a bank account or you can visit a mobile money agent who will accept cash and credit your account.
With funds loaded, you can send and receive money using the mobile money app or the MMO’s USSD code. You can perform various other transactions like Paying bills for utilities or subscriptions, buying airtimes, making in-store purchases at shops and vendors, etc.
What is the regulatory framework for mobile payments?
The regulatory framework for mobile payments in Nigeria was established by the CBN through the “Framework and Guidelines on Mobile Money Services in Nigeria” issued in July 2021. This framework was used to create a structured environment for mobile money operations, to ensure three primary things. The security and stability of the MMOs, their customer’s protection, and financial inclusion.
How does mobile money impact economic growth?
Mobile money impacts economic growth in Nigeria through several progressive impacts. The foremost is through financial inclusion which brings banking to the unbanked and underbanked communities. This allows these people to store their money, transact, and even have access tomicro loans.
Another way it drives the economy forward is how it helps commercial businesses. With the use of mobile money services, small and medium-sized enterprises transact more efficiently and faster. It reduces the use of cash, andtransaction charges and encourages a more dynamic and efficient marketplace.
Moreover, the growth of mobile money services facilitates innovation in the financial sector, with new financial products and services emerging to cater to the evolving needs of mobile money users.
This spurs economic activity and creates new employment opportunities within the fintech industry.
Who are mobile money agents?
Mobile money agents are the backbone of the mobile money ecosystem in Nigeria, serving as the primary contact for the users. They are often everyday people running businesses like shops, kiosks, or dedicated agent outlets who have partnered with a mobile money operator (MMO). They help in spreading financial inclusion by helping users with cash deposits, withdrawals, account registration, and support.
Did CBN ban OPay in Nigeria?
The CBN didn’t ban Opay or any Mobile money operator in the country. The Central Bank of Nigeria only barred some microfinance banks and MMOs in the country, including Opay, Moniepoint, Paga, NowNow, and Kuda, from opening new accounts and accepting new customers.
The ban was due to allegations that these financial institutions were being used to funnel cryptocurrency. CBN lifted the ban in June and all the banks affected can now accept new users.
Bottom line
The world of mobile money operators in Nigeria is an exciting and ever-evolving space. They offer a convenient, secure, and new way to manage finances. As you’ve read these FAQs, mobile money operators empower individuals and SMEs. Whether you’re considering using mobile money for the first time or are curious about the way they work and the frameworks in place, we hope this FAQ has equipped you with the knowledge you need.
