In Nigeria’s rapidly evolving digital payments landscape, telecommunications companies have been pushing into financial services, betting that their vast subscriber bases would give them a strong foothold in mobile money.
Lately that strategy is showing signs of strain. Major telecom operators such as MTN, Airtel and Globacom are grappling with slower-than-expected adoption and fierce competition from standalone fintech firms. After investing heavily in their fintech subsidiaries, the results have been mixed at best, with impairments and operational pressures exposing the difficult realities of Nigeria’s highly competitive payments market.
Nigeria’s mobile money sector has expanded rapidly in recent years. Transactions reached about N20.71 trillion in the first quarter of 2025 alone, reflecting growing reliance on digital payments across the economy. Telecom operators viewed this expansion as an opportunity to extend beyond traditional voice and data services into areas such as payments, savings and lending.
Read also: Telcos bet on IPOs to catch fintechs’ mobile money race
Following regulatory approvals from the Central Bank of Nigeria between 2020 and 2022, telecom operators obtained Payment Service Bank (PSB) licences designed to expand financial inclusion. MTN launched MoMo PSB, Airtel rolled out SmartCash PSB, while Globacom introduced MoneyMaster PSB. Each hoped to leverage its nationwide network infrastructure and agent ecosystem to attract millions of users, particularly among the unbanked population.
However, independent fintech firms such as OPay and Moniepoint moved faster and have since captured a dominant share of the market.
MTN Nigeria, the country’s largest telecom operator, illustrates some of the sector’s biggest challenges. In its 2025 financial statements, the company recorded an impairment of about N62.56 billion on its fintech investments, including MoMo PSB and Yello Digital Financial Services. The impairment reflected a reassessment of the units’ value after sustained losses and weaker-than-expected performance.
Financial disclosures showed that Yello Digital Financial Services had negative net assets, meaning liabilities exceeded the value of its assets. Both fintech subsidiaries required ongoing financial support from MTN to continue operating. After conducting impairment testing under international accounting standards, the company concluded that the estimated ‘value in use’ of the businesses was effectively zero, as projected future cash flows were insufficient to justify their book value.
An independent valuation by Deloitte placed the combined market value of the units at about N40.39 billion, far below their carrying value of roughly N107.95 billion, resulting in the significant write-down.
Operational growth has also been slower than originally anticipated. MoMo PSB ended 2025 with about 3.7 million active wallets, an improvement from earlier lows but still far below MTN’s long-term ambition of reaching 30 to 40 million users. While fintech revenue rose by more than 70 percent in the first half of the year, much of that increase came from airtime lending rather than core payment services.
Even with this growth, fintech remains a relatively small contributor to MTN Nigeria’s broader business, which generated about N5.20 trillion in revenue and N1.11 trillion in profit after tax during the period.
Airtel Africa’s SmartCash PSB in Nigeria reflects a similar pattern of gradual growth but limited scale compared with independent fintech competitors. Mobile money revenue in Nigeria reached about $6 million in the nine months to September 2025, more than doubling from the previous year, while the number of users grew by roughly 50 percent to about 2.2 million.
By early 2026, the number of active customers, defined as users who had transacted within the past 30 days, had climbed to nearly three million. SmartCash offers a range of services including deposits, withdrawals, transfers, bill payments and remittances, all integrated into Airtel’s mobile network.
Across Airtel Africa’s wider markets, the mobile money business has performed strongly. But this is not due to Nigeria’s contribution, it is a case of a tide lifting all boats. In 2024, ex Airtel boss, Olusegun Ogunsanya outlined the telco’s mobile market strength to be in six markets away from Nigeria. Four of which are in East Africa: Zambia, Uganda, Tanzania, and Malawi. The other two are Gabon and DR Congo, in the Francophone markets, the CEO said. Part of the winning strategy includes first-mover advantages, key infrastructure and distribution. In Nigeria, major telcos like MTN and Airtel Africa failed to capture the fintech aspect because banks and fintechs lead Nigeria’s financial ecosystem, compared to the East Africa case where Safaricom provides data and voice.
Globacom’s MoneyMaster PSB has struggled to gain comparable traction. Launched in 2022 with its G-Kala wallet service, the platform targets financially excluded users through basic wallet services, bill payments and agent banking.
The platform has expanded its biller network and continues to promote customer incentives such as airtime bonuses and simplified wallet registration. By 2024, MoneyMaster supported more than 4,000 billers and had begun deploying improved software tools for its agent network to enhance service delivery.
Yet clear data on large-scale adoption remains limited, and the platform appears to lag its rivals in both user growth and transaction volume. Customer feedback on social media has also highlighted technical issues with the mobile application, suggesting operational challenges that could slow wider adoption.
Underlying many of these difficulties is intense competition from independent fintech firms that now dominate Nigeria’s digital payments ecosystem.
Moniepoint, for example, processed about N412 trillion in transactions across roughly 14 billion payment events in 2025, accounting for an estimated 80 percent of in-person payment volumes nationwide. The company also extended around N1 trillion in credit to more than 70,000 businesses, strengthening its presence among merchants and small enterprises.
OPay has built a similarly formidable presence, processing roughly $12 billion in monthly transactions across a user base of about 50 million customers.
Both companies have scaled quickly through aggressive agent expansion, streamlined mobile apps and incentive programmes that reward frequent users. Their operational speed and focus allowed them to capture significant market share before telecom operators fully launched their PSB platforms.
Regulatory dynamics have also shaped the competitive landscape. While PSBs were created to promote financial inclusion, they face restrictions that prevent them from offering full lending services like traditional banks. This limits the revenue opportunities available to telecom-backed fintech platforms.
To remain competitive, telecom operators have begun adopting more aggressive strategies.
Airtel’s SmartCash has introduced a zero-charges model that eliminates fees for transfers, bill payments and SMS alerts, costs that many competing services still impose. The platform also offers savings accounts with annual interest rates of up to 15 percent, paid daily and compounded, while Airtel subscribers receive cashback incentives on airtime and data purchases.
The company has expanded partnerships to support international remittances and continues to leverage Airtel’s network presence across Nigeria’s 774 local government areas.
MTN, meanwhile, is pursuing a broader strategic shift. Despite the recent impairment charges, the company has continued to invest in MoMo PSB, injecting additional capital and consolidating ownership of its fintech subsidiaries.
At the group level, MTN is also exploring acquisitions across Africa’s fintech sector, seeking opportunities in payments, remittances and digital lending that could integrate into its expanding financial services platform.
Globacom has focused largely on promotional incentives and improvements to its agent network, although the scale of its investment remains smaller than those of its competitors.
These responses underline the high stakes involved. Incentives such as zero-fee transfers and high-interest savings products may help attract users, but they also raise questions about long-term profitability. Likewise, acquisitions and heavy investment carry the risk of further financial write-downs if the businesses fail to scale as expected.
Read also: Nigeria orders telcos to report cyberattacks within four hours from 2027
Nigeria’s experience contrasts sharply with markets such as Kenya, where telecom-driven mobile money services like M-Pesa became dominant early on. In Nigeria, independent fintech companies established strong footholds before telecom operators could fully deploy their PSB platforms, making it far more difficult for telcos to catch up.
For now, the gap remains wide. Standalone fintech firms process transactions worth trillions of naira each year, while telecom-backed platforms are still fighting to build user bases measured in the millions.
Telecom operators remain optimistic that the long-term potential of digital financial services will eventually justify their investments. Yet the recent impairments and competitive pressures suggest that the path to profitability may take longer and prove far more expensive than initially anticipated.
In Nigeria’s fast-moving payments race, the advantage still firmly rests with the fintech specialists.
