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.
