Interswitch, a big payments company backed by Visa in Nigeria, is joining forces with M-Kudi, a mobile money provider. They want to become a Payment Service Bank (PSB), approved by the Central Bank.
If regulators agree, this merger will let Interswitch make accounts and keep customer money. It’s a big change for them because they’ve mostly focused on payments until now. They also got a licence to run a mobile telecom service earlier.
Experts say both companies want a PSB licence to have more control over their money and build on what they’re already good at.
Interswitch didn’t say anything about this yet.
With a PSB licence, Interswitch, which made $42 million last year, can deal in foreign money and offer banking services directly.
But, convincing Nigerians to use these services won’t be easy. Interswitch has been in Nigeria for a long time, so that could help.
The Central Bank made rules for PSBs in 2018 to help more people in rural areas access banking. These banks must do a quarter of their business in those places.
Interswitch makes most of its money from banks. Now, they have to build a big network of agents all over Nigeria.
However, PSBs have limits. They can’t give out loans or handle foreign money like regular banks. This makes them less appealing to people and businesses.
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