Mr Olusegun Zaccheaus, Senior Manager, Management Consulting, KPMG Advisory Services, says Payment Service Banks (PSBs) will revolutionise financial services in Nigeria by ushering in innovative payment solutions to customers.
The manager made the assertion during the First Edition of the Lagos FinTech Week held in Lagos on Thursday.
He said that a payment service bank was like any other bank but operated on a smaller scale without incurring any risk.
Zaccheaus said that such banks could carry out most banking operations but could not advance loans or issue credit cards.
“These banks operate digitally (on mobile phones and other devices using internet) rather than through physical branches.
Zaccheaus said that PSBs were established with the objective of driving financial inclusion by leveraging on technology.
“The payment service banks will leverage existing financial structures to deepen service delivery among the rural unbanked or under-banked.
“These new entities could become `challenger banks’ as they take on traditional banks in Nigeria.
“The PSBs, if successful, have the potential to disrupt the incumbent bank’s market from several fronts,’’ he said.
Zaccheaus said that although PSBs had the capability to drive deeper market penetration, the limitations placed on their activities made it possible for banks to collaborate with them.
He said that, if banks collaborated with PSBs, they could deepen the services of the banks to the unbanked and increase revenue.
He said that the limitations of PSBs were the fact that they could not grant any form of loans, deal in foreign exchange market or prescribe and accept foreign exchange.
Zaccheaus noted that, however, PSBs could accept deposits from individuals and small businesses; carry out payment and remittance services through various channels.
He said they could also issue debit and prepaid cards, invest in Central Bank of Nigeria (CBN) securities and carry out activities as prescribed by the CBN from time to time.
The financial expert noted that over 65 per cent of the financially-unserved population was in the rural areas and concentrated in the north.
He said that a wider reach of the payment service system would reduce this percentage drastically.
“Asides from providing services to the under-served, it will also facilitate the implementation of social inclusion.
“The PSBs will provide a suitable platform for the distribution of funds and bettering the implementation of government’s social inclusion policies,’’ Zaccheaus said. (NAN)
