Interswitch has announced a merger with M-Kudi, a mobile money provider, as it seeks a payment service bank (PSB) license from the Central Bank.
Subject to regulatory approval, the merger will permit Interswitch to create accounts and hold customer deposits, making it the first time the fintech would offer non-payment services. This latest development follows the acquisition of a Tier 5 MVNO (Mobile Virtual Network Operators) license by Interswitch and the company’s decision to enter Nigeria’s telecom industry.
Also, with the PSB licence, Interswitch, which brought in $42 million in revenue for its 2023 fiscal year that ended March 31, will be able to receive foreign currencies for its customers and directly offer agency banking services.
According to TechCabal, an industry insider speaking on the latest development said, “The PSB use case for these companies (payment companies) is the same: to keep some float of their transaction volumes in-house and consolidate on their already established strengths.”
Though Interswitch has declined to comment on the current situation, the fintech is clearly motivated by the need to reinforce its strong position in the payment industry.
Moving forward, Interswitch still has a lot to do. The company, which derives most of its revenue from offering services to its banking customers, will have to invest in a nationwide physical network of agents and continue to look to roll out impressive innovative services that would sway the attention of millions of Nigerians.
