A Payment Service Bank (PSB) is a kind of banking system that provides a limited range of banking services and operates as a payment system provider.
Several things set payment service banks apart from typical banks. For instance, PSBs cannot open current accounts, lend money, or issue credit cards in contrast to ordinary banks. They are also prohibited from having more than 25% of their deposits as time deposits, which are deposits with a fixed term.
The importance of Payment service Banks
payment service banks can handle digital transactions, receive deposits, and even print prepaid and debit cards.They can also provide a variety of banking services like bill payment, direct debit, and credit as well as money transfers.
Additionally, providers of the service can also use their platform to provide customers with insurance, mutual funds, and other associated financial services. This can involve accepting and processing payments, enabling customers to make transfers and payments online or through mobile devices, and giving them access to financial products. payment service banks may also provide additional financial services like wealth management and investments.
However, circumstances may arise where payment service banks may also provide traditional banking services, like checking, even though they might not be subject to the same level of regulatory oversight as conventional banks.
Why PSBs were introduced by CBN in Nigeria
Payment service Banks play a critical role in increasing financial inclusion and providing access to banking services to underserved populations, such as those living in rural areas or those who are unbanked or underbanked.
According to data from the Nigeria Inter-Bank Settlement System (NIBSS), there were 133.5 million bank accounts in Nigeria as of December 2021, but only 54 million BVNs were registered as of April 10, 2022. This huge discrepancy presents an opportunity for PSBs to help many underbanked and unbanked individuals enter the financial service ecosystem.
List of Payment Service Banks Established By Mobile Network Operators in Nigeria
This article will only foresee payment service banks launched by telecommunication companies in Nigeria. This include the likes of:
- 9PSB and
Let’s take this time out to explore them one by one!
MTN Momo is a mobile money service offered by the MTN Group, a multinational telecommunications corporation. Users of MTN momo can use their mobile phones to perform a variety of financial transactions, such as sending and receiving money, paying bills, and purchasing goods and services. The service is available in a number of African countries and is widely used as a convenient and secure alternative to traditional banking methods.
Users can open a mobile money wallet by going to an MTN service center or dialing a short code from their phone. They can then deposit money into the account with cash, a bank transfer, or another digital method, and use it to conduct transactions.
Airtel, a telecommunications corporation with operations in various African nations, offers the mobile money service SmartCash PSB. With Airtel SmartCash, customers may carry out a number of financial operations on their mobile devices, including sending and receiving money, paying bills, and buying goods and services. Customers can open a mobile money account by dialing a short code from their phone or visiting an Airtel service center.
Customers can make cash deposits, bank transfers, or other electronic payments into their Airtel Smartcash accounts, which they can subsequently use to carry out transactions.
The service is frequently utilized as a practical and safe substitute for conventional banking procedures, which can be expensive or difficult to use, especially in rural areas or other places with weak financial infrastructure.
Like many other mobile money services, Airtel SmartCash provides extra features and services like airtime top-up, bill payment, and cash-out choices. You can also open a savings account. The platform offers interest to users who recharge their phones.
9 payment service bank
9PSB and 9mobile telecom company collaborate to promote financial inclusion in Nigeria. 9 payment service bank provides unrestricted Peer 2 Peer funds transfer within and to various Nigerian bank accounts. They also provide bill payment, airtime top-up, and a variety of other vtu services.
MoneyMaster PSB is a service provided by the Nigerian telecommunications company Globacom that allows users who open the account to transfer funds from their account to another MoneyMaster PSB account or bank. It enables customers to make payments to their savings account in one or multiple transactions, or even on a set schedule.
It is a convenient service for customers who want to easily manage their finances, transfer funds from their MoneyMaster account to a bank account, and make payments to other people’s accounts. All transactions are done securely and seamlessly.
In as much as the above mentioned Telco’s PSBs offers the same banking solutions, they are however, unique in their own unimaginable ways. So get started with any of the above to enjoy full bouquet they offer!
cdpinstitute.org: The Rise of Telco Payment Service Banks in Nigeria.