Fintech operators like Opay and PalmPay led Nigeria’s mobile money transactions haul of N79.55 trillion in 2024, a 69.58 percent increase from 2023.
Since 2020, mobile money transactions have grown by 2,507.94 percent, mirroring the surge in electronic payments, which crossed over N1 quadrillion last year.
While fintechs continue to thrive, telecom operators are struggling to gain ground in the mobile money space, a contrast to what is happening in other African markets like Kenya and Ghana, where telcos dominate the space.
MTN’s MoMo Payment Service Bank saw customers’ deposits fall 49.44 percent to N3.84 billion in 2024 from N7.60 billion, as its number of active wallets fell to 2.8 million from 5.3 million.
Airtel’s SmartCash generated $3 million in revenue in the nine months ending December 2024, a 200 percent increase from the $1 million it generated in the same period of 2023 in the country. Its active number of customers grew to 1.5 million.
Read also: The rise of traditional banks in Nigeria’s fintech space
These numbers pale in comparison to PalmPay and OPay. PalmPay reported $6 million in monthly transactions in 2024, with 16 million active monthly users and a total customer base of 35 million. Opay boasts over 40 million users, 10 million daily active users, and 100 million daily transaction volumes, according to Dotun Adekunle, its CTO and COO.
Mobile money origins
Since 2013, mobile money accounts in Nigeria have doubled, according to GSMA, the global body for telco. In 2023, over a third of new registered and active 30-day accounts globally were from Nigeria, Ghana, and Senegal.
Nigeria’s mobile money space is driven by both mobile network operators (MNO)-led and non-MNO-led providers, subject to different types of licences. While these licences allow some similar activities, differences in what each can offer limit their influence on financial inclusion.
In 2018, the Central Bank of Nigeria (CBN) introduced Payment Service Banks (PSBs), allowing MNOs to provide limited financial services, under the condition that 25 percent of operations must target rural areas. While this aimed to drive financial inclusion, it also came with capital requirements and service limitations, such as restrictions on offering loans.
Licensed PSBs include MTN’s MoMo, Airtel’s SmartCash, 9mobile’s 9PSB, Globacom’s Money Master, and Unified Payment’s Hope PSB. Though MTN and Airtel have grown their mobile money arms in the last three years, it pales in comparison to their size, where they both control 85.9 percent of the country’s telecom market.
GSMA noted that “higher capital requirements and rural operation mandates” for PSBs may be a key reason telcos lag behind fintechs. It added that regulatory restrictions reduce competition and limit the broader impact on financial inclusion.
Telcos’ PSBs must meet capital requirements of at least N5 billion, while other mobile money operators are to target N2 billion.
Bank-led model drags growth
Letting banks drive mobile money adoption has curtailed telcos’ growth, according to industry experts. In 2021, the CBN released its ‘Regulatory Framework for Mobile Money Services in Nigeria,’ outlining two models for mobile money implementation.
The model included the bank-led, where a bank and/or its consortium serves as the lead initiator; and the non-bank-led, where a corporate organisation duly licensed by the CBN serves as the lead initiator. Telcos were relegated to infrastructure providers.
At the time, Gbenga Adebayo, chairman of, Association of Licensed Telecommunication Operators of Nigeria (ALTON), said, “We think penetration will be slow. We are convinced that we are the industry with the ready infrastructure all over the country. If you talk about mobile penetration, the use of mobile phones for financial services, the last mile is handled by the operators.”
This model contrasts countries like Kenya, which gave telcos a freer hand, producing runaway successes like M-Pesa by Safaricom.
Ikechukwu Nnamani, former chairman, Association of Telecommunications Companies of Nigeria (ATCON), said, “Making it telecom-led would have led to faster adoption. Today, we have more telecom subscribers than people in the banking industry.”
Telcos up investments
Despite setbacks, telcos are not backing down. In 2024, MTN increased its investment in MoMo Payment Service Limited by N46.35 billion from N25.2 billion in 2023. This included N16.35 billion for the acquisition of the non-controlling interest, and a N30 billion cash injection.
The telco also revamped its growth strategy, shrinking its agent count by 79.2 percent to 68,016 and merchant networks by 76.8 percent to 75,168 to recalibrate, even as transaction volumes rose 4.3 percent.
“It was essential to establish a sustainable growth trajectory for our MoMo PSB ecosystem,” said Karl Toriola, MTN Nigeria CEO.
MTN has also applied for the Payment Service Solutions Provider (PSSP) and Payment Terminal Service Provider (PTSP) licences for MoMo PSB to fully tap into digital payments, according to reports.
MTN Group recently announced plans to spin off its fintech business in Nigeria, Ghana, and Uganda in the first half of 2025. As part of this move, Mastercard is set to acquire a minority stake, which could be worth up to $200 million, valuing the unit at $5.2 billion.
Airtel Nigeria recently emphasised its focus on customer acquisition, reporting 1.5 million active mobile money users by December 2024. In 2021, its parent arm, Airtel Africa, sold a $100 million minority stake in its mobile money unit to Mastercard.
According to GSMA, telcos’ large capital base, countrywide presence, and advanced technologies give them the ability to scale their PSBs. Together, MTN and Airtel control 85.9 percent of Nigeria’s telecom market, with 87.55 million and 57.67 million subscribers, respectively.
Yet, their ability to scale depends on greater regulatory flexibility, which has helped the likes of Kenya, Tanzania, and Ghana.
“Allowing mobile money providers to provide new services such as micro credits can further accelerate financial inclusion and contribute to the economy,” GSMA noted.
