Financial Services In Nigeria: Difference Between MMOs, PSBs, and MFBs

Mobile Money Services (run by Mobile Money Operators [MMOs]), Microfinance Banks (MFBs), and Payment Service Banks (PSBs) are three different financial services under which some companies in the financial sector operate to provide the unbanked and underbanked access to beneficial financial tools. Separate licenses are acquired to provide these services.  However, due to the similarity in the financial services, the differences between them are sometimes unrecognisable. In the table below, we compare the functionalities, capabilities and restrictions of MMOs, MFBs and PSBs.

 

SERVICES	MMOs	PSBs	MFBs
Minimum Capital	N2 Billion	N5 Billion	N200 Million- Unit N1Billion – State N5Billion – National
Service Area	No restriction	25% operations in rural areas	Physical restriction depending on type (Unit, State, National).
Loans	Not Permitted	Not Permitted	Permitted
Bank Accounts/Wallets	Bank   Led:   Bank Account/Wallet Non-bank   Led: Wallet only	Wallet only	Bank   Account/ Wallet
Transfers (In/Out)	Permitted	Permitted [except from public and no forex transaction]	Permitted   [no foreign transactions or foreign electronic transfers]
Airtime Purchase	Permitted	Permitted	Permitted
QR Code Payments	Permitted	Permitted	Permitted
USSD Service	Permitted (subject to NCC consent)	Permitted  (subject to NCC consent)	Permitted (provided letter of no objection is issued by the CBN)
NIBSS Connection	Required	Required	Required
Cards	Debit	Debit	Debit & Credit
Agent Banking	Permitted	Permitted	Permitted
Who Can Operate	Banks Tech Coys	Telcos MMOS Supermarkets Courier coys Fintech Companies	Individuals, companies, or foreign investors

In conclusion, MMOs, MFBs and PSBs offer services that are similar but not quite the same. It is important that investors and users of services under these platforms are aware of the functions and limitations permitted and imposed by the licenses before investing in or procuring the services of companies using these platforms.