In Nigeria's rapidly evolving digital payments landscape, telcos are emphasizing financial services, betting that their huge customer bases will give them a strong foothold in mobile money.
Lately that strategy has been showing signs of strain. Major telecom operators such as MTN, Airtel and Globacom are struggling with slower-than-expected adoption and stiff competition from standalone fintech firms. Having invested heavily in its fintech subsidiaries, results have been mixed at best, with losses and operating pressures highlighting the tough realities of Nigeria's highly competitive payments market.
Nigeria's mobile money sector has expanded rapidly in recent years. Transactions reached approximately N20.71 trillion in the first quarter of 2025 alone, reflecting the growing reliance on digital payments across the economy. Telecom operators saw this expansion as an opportunity to expand beyond traditional voice and data services into areas such as payments, savings and lending.
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Following regulatory approval from the Central Bank of Nigeria between 2020 and 2022, telecommunications operators obtained Payment Services Bank (PSB) licenses designed to expand financial inclusion. MTN launched Momo PSB, Airtel launched SmartCash PSB, while Globacom introduced Moneymaster PSB. Each hopes to leverage their nationwide network infrastructure and agent ecosystem to attract millions of users, particularly among the unbanked population.
However, independent fintech companies like Opay and MoneyPoint moved quickly and have since captured a major share of the market.
MTN Nigeria, the country's largest telecommunications operator, illustrates some of the sector's biggest challenges. In its 2025 financial statements, the company recorded a loss of about N62.56 billion on its fintech investments including MoMo PSB and Yellow Digital Financial Services. Impairment reflects the revaluation of the value of units after sustained losses and weaker than expected performance.
Financial disclosures revealed that Yellow Digital Financial Services had negative net worth, meaning that liabilities exceeded the value of its assets. Both fintech subsidiaries required continued financial support from MTN to continue operations. After conducting impairment tests under international accounting standards, the company concluded that the estimated 'value in use' of the businesses was effectively zero, as the estimated future cash flows were insufficient to justify their book value.
An independent valuation by Deloitte placed the combined market value of the units at approximately N40.39 billion, significantly below their carrying value of approximately N107.95 billion, resulting in significant write-downs.
Operating growth has also been slower than originally anticipated. MoMo PSB ended 2025 with about 3.7 million active wallets, an improvement from the previous low but still well short of MTN's long-term ambition to reach 30 to 40 million users. While fintech revenues grew by more than 70 percent in the first half of the year, most of that growth 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 shows a similar pattern of gradual growth but at a limited scale compared to independent fintech competitors. Mobile money revenue in Nigeria reached nearly $6 million in the nine months to September 2025, more than double from the previous year, while the number of users increased by nearly 50 percent to about 2.2 million.
By the beginning of 2026, the number of active customers, defined as users who have made a transaction within the last 30 days, had grown 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 broader markets, the mobile money business has performed strongly. But this is not because of Nigeria's contribution, it is a case of the tide lifting all boats. In 2024, former Airtel boss, Olusegun Ogunsanya, underlined the telco's mobile market strength in six markets from Nigeria. Four of which are in East Africa: Zambia, Uganda, Tanzania and Malawi. The other two Francophone markets are Gabon and DR Congo, the CEO said. Part of the winning strategy includes first-mover advantage, key infrastructure and distribution. In Nigeria, major telcos like MTN and Airtel Africa failed to capture the fintech aspect as banks and fintechs lead Nigeria's financial ecosystem, compared to the case in East Africa where Safaricom provides data and voice.
Globacom's Moneymaster PSB has struggled to achieve comparable holdings. 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 over 4,000 billers and had begun deploying improved software tools to its agent network to enhance service delivery.
Yet clear data on mass adoption is limited, and the platform appears to lag behind 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 widespread adoption.
Behind many of these difficulties is intense competition from independent fintech firms that now dominate Nigeria's digital payments ecosystem.
For example, MoneyPoint processes approximately N412 trillion in transactions across approximately 14 billion payment events in 2025, an estimated 80 percent of personal payment volume nationwide. The company also extended loans worth about N1 trillion to over 70,000 businesses, strengthening its presence among traders and small enterprises.
OPay has built an equally strong presence, processing approximately $12 billion in monthly transactions across a user base of approximately 50 million customers.
Both companies have grown rapidly through aggressive agent expansion, streamlined mobile apps, and incentive programs that reward frequent users. Their operational speed and focus allowed them to gain 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 providing full lending services like traditional banks. This limits the revenue opportunities available for telecom-enabled fintech platforms.
To remain competitive, telecom operators have started adopting more aggressive strategies.
Airtel's SmartCash has introduced a zero-fee model that eliminates charges 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 customers get cashback incentives on airtime and data purchases.
The company has expanded the partnership to support international remittances and continues to leverage Airtel's network presence across 774 local government areas in Nigeria.
Meanwhile, MTN is attempting a broader strategic makeover. Despite recent loss allegations, the company has continued to invest in MoMo PSB, infusing additional capital and strengthening ownership of its fintech subsidiaries.
At a group level, MTN is also exploring acquisitions in Africa's fintech sector, looking for opportunities in payments, remittances and digital lending that can integrate into its expanding financial services platform.
Globacom has focused largely on promotional incentives and improving its agent network, although the scale of its investment is smaller than that of its competitors.
These reactions highlight the high risks 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. Similarly, if businesses fail to scale as expected, acquisitions and heavy investments risk further financial write-offs.
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Nigeria's experience is completely different from markets like Kenya, where telecom-driven mobile money services like M-Pesa were dominant early on. In Nigeria, independent fintech companies gained a strong foothold before telecom operators fully deployed their PSB platforms, making it even more difficult for telcos to catch up.
For now, the gap remains wide. Standalone fintech companies process trillions of dollars worth of transactions every year, while telco-backed platforms are still struggling to build a user base in the millions.
Telecom operators remain optimistic that the long-term potential of digital financial services will ultimately justify their investment. Yet recent losses and competitive pressures suggest the road to profitability may take longer and prove more costly than initially anticipated.
In Nigeria's booming payments race, the advantage still lies with fintech experts.
