MoMo PSB, MTN Nigeria’s fintech arm, lost 2.5 million active wallets in 2024—two years after its launch. CEO Karl Toriola explained that the decline is part of a shift to improve service penetration, boost monetization, and lower acquisition costs.
MTN and Airtel Africa were expected to disrupt Nigeria’s financial sector when they entered in 2022. With MTN’s mobile money operations in 24 African countries and Airtel Money serving 38 million users, they seemed poised to dominate. However, their impact has been less dramatic.
MoMo PSB is one of five Payment Service Banks (PSBs) licensed by the Central Bank of Nigeria (CBN) to increase financial inclusion. Alongside 9PSB, Smartcash PSB, Money Master PSB, and Hope PSB, MoMo was designed to offer banking services beyond traditional institutions. However, PSBs cannot offer loans, forex, or investments beyond government-approved securities, limiting their revenue potential.
Unlike fintech giants like Opay, Moniepoint, and Palmpay, PSBs have struggled to gain market traction. In Nigeria, mobile money relies on banking agents due to poor internet access and low smartphone penetration. Many rural users lack the means for digital banking, making agents essential.
MoMo PSB has used MTN Nigeria’s infrastructure to offer money transfers, savings, and payments. MTN invested ₦16.4 billion in MoMo by the end of 2022, followed by ₦9.4 billion in 2024, acquiring full ownership. This initially drove strong growth, with active wallets rising from 2 million in 2022 to 5.3 million in 2023. The agent network also grew from 103,000 to 327,000, while its merchant ecosystem reached 324,000 by year-end.
However, in 2024, MoMo’s fortunes changed. Active wallets fell to 2.8 million, and cash deposits dropped from ₦7.6 billion to ₦3.8 billion. The agent and merchant networks also declined significantly, shrinking to 75,168 merchants and 68,016 agents. Some experts believe PSBs are now focusing on cities and existing bank customers rather than rural communities due to high operational costs.
Despite setbacks, transaction volume rose by 4.3% in 2024. Toriola sees this as a sign of a higher-quality wallet base and strong demand. Some industry analysts suggest MoMo is reducing reliance on agents, possibly due to fraud concerns. In May 2022, MoMo PSB lost ₦22.3 billion ($53 million) to a security breach, which may have influenced its strategy shift.
MoMo PSB is now expanding its services, applying for Payment Service Solutions Provider (PSSP) and Payment Terminal Service Provider (PTSP) licenses. These will allow it to manage payment gateways, merchant aggregation, and PoS terminals, reducing reliance on agents while better serving SMEs and individuals.
Looking ahead, Toriola said the company will focus on user engagement and retention to increase wallet activity before the end of the year.
