Payment service banks in Nigeria: Opportunities and challenges

GSMA released a report exploring the potential role of Payment Service Banks (PSB) in promoting financial inclusion within the boundaries of the PSB regulatory framework in Nigeria and the opportunities and challenges for building commercially viable PSB operations. Additionally, the report highlights key lessons from the experiences of payments banks in India, which are similar to PSBs in Nigeria in terms of the licensing framework. To this aim, it outlines the key enablers and challenges facing PSBs and elaborates on how they can scale operations via partnerships while also enhancing the value proposition for under and unbanked people. The report found that regulations limit the range of financial products that PSBs can offer, so licensed organisations need to have the right mix of resources and capabilities to succeed. Yet, partnerships in payments services and product distribution with organisations in key sectors will serve to enhance both profitability and the value proposition for PSBs.