CBN to Revoke Licenses of 15 Mobile Money Firms

Central Bank of Nigeria (CBN) may revoke the licences of at least 15 struggling mobile money operators under new minimum finance rules.

New Telegraph tipped the majority of the 21 companies operating services in the country to fall foul of tough new cash requirements.

CBN rules, effective from the end of December 2017, stated operators must have NGN1 billion ($2.8 million) in reserves.

This sum is set to rise to NGN2 billion on 1 July, 2018 – a level the newspaper said many providers would fail to reach.

Isaac Okorafor, CBN corporate communications director said he didn’t expect any “serious operator” to lose its licence when the July requirement takes effect.

Though Okorafor was silent on the number of operators that may be affected at deadline with full implementation of the new N2 billion recapitalisation policy, New Telegraph gathered that more than 15 of the licensed mobile operators, which lack the financial muscles to recapitalise as required by the apex bank come July, may have their licences withdrawn.

Mobile money is an aspect of financial transactions where financial values are transferred from one person to another using Unstructured Supplementary Service Data (USSD) platform on mobile networks.

The electronic fund transfer platform was introduced to complement the entire spectrum of cashless economy policy effectively introduced by the apex bank in January 1, 2012.

Till date, some 21 mobile money licences have been issued by the CBN with only a few of them operating effectively, including United Bank for Africa/ AfriPay (U-Mobile); Zenith Bank (EazyMoney); GTBank (GTMobileMoney); FirstBank/Pridar – (First- Monie); Stanbic IBTC (*909# Mobile Money) and Ecobank (Ecobank Mobile Money) and others.

It was, however, gathered that most of the mobile money operators not backed by any bank have had their operations crumbled due to what industry pundits refer to as “paucity of funds to run effective operations to compete in the financial services market” and may find it difficult to meet the deadline “without some re-alignment.”

Operators within this fold, as gathered, include Parkway Projects (ReadyCash); eTranzact (PocketMoni); PagaTech (Paga); Fortis MFB (Fortis Mobile Money); Monitize (Monitize mobile money); FETS (My Wallet); Eartholeum (QikQik); Teasy Mobile (Teasy Mobile); Mkudi (Mimo); PayCom (Payment Irrespective of Distance or Obstacles – PIDO); VTNetwork (Virtual Terminal Network – VTN) and Cellulant (CeLLulant) among others. Despite having 21 mobile money operators licensed by the CBN in the circulation, the volume of transaction on the payment platforms is still grossly low, according to data obtained on NIBSS official website.

New Telegraph gathered that on the basis of the licensees’ inactivity occasioned by sheer paucity of funds to effectively roll out, the CBN has introduced the recapitalisation of mobile money operations in order to have strong players with adequate financial chess power to advance mobile financial services in the country.

Speaking on the misunderstanding of their role and conditions of licensing, Shonubi, in an interview with New Telegraph, said, “Most mobile money licensees have left what should be their niche markets to compete with big financial institutions such as banks. Until, they refocus their attention towards playing in micro transactions area rather competing with the banks’ market, they will continue to have problem.”

According to him, mobile money operators, looking for where to make money from, decided to run after bank customers who also have mobile phones and were determined to take some of them off the hook of the banks, which is a misplaced priority.

Mr. Ike Nnamani, president, Medallion Communications, blamed the poor performance of mobile money operators on lack of adequate funding, lack of technical skills, poor shared infrastructure arrangement as well as lack of focus as to what their mandate should be.