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Interswitch, a leading Nigerian fintech firm with backing from Visa, is embarking on a strategic merger with M-Kudi, a prominent mobile money provider, with the aim of obtaining a Payment Service Bank (PSB) license from the Central Bank of Nigeria.
This strategic move marks a significant departure for Interswitch, signaling its intention to diversify its offerings beyond conventional payment services. By pursuing a PSB license, Interswitch is positioning itself to transform into a comprehensive financial services provider, integrating banking solutions and fortifying its foothold in Nigeria’s digital payments landscape.
Securing a PSB license would empower Interswitch to manage customer deposits and offer an expanded array of financial products, opening up new avenues within the banking sector.
Armed with this license, Interswitch, which generated $42 million in revenue for its fiscal year ending March 31, 2023, will gain the ability to receive foreign currencies for its clientele and directly provide agency banking services.
The proposed merger between Interswitch and M-Kudi comes on the heels of the fintech company’s announcement to venture into Nigeria’s telecommunications industry. This move follows its acquisition of a Tier 5 Mobile Virtual Network Operator (MVNO) license from the Nigeria Communications Commission (NCC) for ₦500 million ($1.08 million) in May 2023.
Leveraging its telco partner’s infrastructure, Interswitch aims to deliver value-added services to consumer segments that have historically been overlooked or underserved by traditional telecom providers.
Reports suggest that the company is exploring the introduction of a virtual telecoms model with minimal capital expenditure, utilizing the acquired license. This model is envisioned to merge payment and telecom services, catering to both B2B customers and consumers alike.
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