26.3 C
Sunday, March 26, 2023

Scammers Steal N10.5bn From MTN Nigeria’s MoMo PSB

Must read

Listen now
- Advertisement -
- Advertisement -

MTN Nigeria (MTNN) has been hit by scammers who managed to siphon over N10.5 billion ($22.8 million) from its Fintech subsidiary MoMo Payment Service Bank (PSB) Limited.

“The losses were incurred from unauthorised transfers caused by a system glitch in MoMo PSB,” MTN Nigeria said in notes accompanying its Financial statements for 2022, seen by MoneyCentral.

MoMo PSB, MTN’s much hyped fintech subsidiary, which commenced commercial operations in May 2022, has struggled to make an impact with challenges such as its Nigerian Interbank Settlement System (NIBSS) interface being temporarily suspended, last year.

NIBSS owns infrastructure for handling inter-bank payments in order to remove potential bottlenecks associated with inter-bank funds transfer and settlement. It is owned by the Central Bank of Nigeria (CBN) and all licensed Deposit Money Banks (DMBs) in Nigeria.

MTNN has invested N16.4 billion in the MoMo PSB subsidiary as at year-end 2022.

The MoMo Payment Service Bank Limited (MoMo PSB) is licensed by CBN to facilitate high-volume lowvalue transactions in remittance services, micro-savings and withdrawal services in a secured technology-driven environment to further deepen financial inclusion in Nigeria.

MTNN holds 80% of the voting shares while Axcani Limited holds 20% non- controlling interest.

In the third quarter of 2022, MTN said it moderated commercial activities and prioritised the enhancement of its control systems, apparently in response to the scam,

This resulted in pressure on its active base and transactions on its MoMo PSB network.

Deposits held for mobile money (MoMo) customers was N1.257 billion in December 2022, down by 28% from N1.745 billion in Q3 (Sept), 2022 and compared to N1.091 billion as at June 2022, data seen by MoneyCentral shows.

Fig 1: MoMo PSB Slow Deposit Growth

The deposits held for MoMo customers are measured at their carrying amounts considering that these are either due or demandable at short notice. The corresponding assets are held as restricted cash.

Still MTNN is bullish about the future growth of MoMo PSB, despite the problems. Active MoMo wallets were approximately 2 million at year-end 2022, up from 1.8 million active MoMo wallets, recorded in Q3, but down from 2.4 million in Q2, 2022.

The Nigerian Interbank Settlement System (NIBSS) interface was also reopened in Q4, after being temporarily suspended to enhance control systems, starting with inbound transfers into customer wallets.

“We are in the final phase of onboarding deposit money banks. The outbound phase will be completed in Q1 2023, accelerating full commercial activities and the growth of active wallets,” Karl Toriola, Chief Executive Officer of MTN, said.

MTN said it expanded its mobile money (MoMo) agent network in Nigeria by adding over 88,000 active agents, bringing the total number to approximately 224,000, up from 188,000 agents in Q3.

“Our agent network continued to play a pivotal role in our MoMo ecosystem, bringing the service closer to our customers,” MTN said.

- Advertisement -
- Advertisement -

More articles


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

- Advertisement -

Latest article