GTB: telcos payment services licence threatens banks
By Kokumo Goodie, Lagos, Nigeria
A new report by Guaranty Trust Bank has said the decision of the Central Bank of Nigeria (CBN) to license telcos for payment services constituted threat to banks operating in the country.
The report titled: Nigeria Macro-Economic and Banking Sector Themes for 2019, the lender said the payment service banks (PSBs) will compete with commercial banks for earnings.
“A more compelling threat, however, relates to the recent decision by the CBN to license Payment Service Banks (PSBs) to facilitate transactions in remittance services, microsavings and withdrawal services in rural areas,” it said in the report released earlier in the week.
Describing the move as a positive for customers, the report said it would improve customer service and digitalisation of banking services while enhancing financial inclusion.
MTN Nigeria and Airtel had announced plans to delve into mobile money services last year with the former expressing hopes that it would get the CBN’s approval and launch in the second quarter of this year.
The PSB license will, however, not allow the telcos offer lending services and participate in the foreign exchange market.
In the report, the tier one lender said the capacity of financial technology (FinTech) companies to gain a significant market share would be limited in the absence of collaborations.
The bank said the merger between Diamond and Access banks could trigger other mergers in the sector and increase the competitive landscape in the industry.
The merger, which is expected to be complete in April, will produce the country’s largest bank; displacing First Bank who has occupied the position for years.