MTN’s MoMo PSB Resets Strategy After 46% Drop in Active Users

MTN Nigeria’s mobile money service, MoMo Payment Service Bank (PSB), is undergoing a major strategic reset after experiencing a sharp decline in active users. The company reported a 46% drop in active wallets in 2024, falling from 5.3 million at the end of 2023 to 2.8 million by the close of the year. This decline has prompted MTN’s MoMo PSB to rethink its approach to sustaining growth and user engagement.

The drop in active users marks a significant setback for MoMo PSB, which initially saw rapid growth after its launch in 2022. By the end of 2023, the platform had expanded its agent network to 327,000 and built a merchant ecosystem of over 324,000 merchants. However, by 2024, these numbers had plummeted, with agents decreasing by nearly 79% and merchants shrinking by about 77%. Additionally, cash deposits from wallet users halved, dropping from ₦7.6 billion to ₦3.8 billion.

According to MTN Nigeria’s CEO Karl Toriola, this decline was part of a deliberate strategy shift aimed at improving operational efficiency and focusing on high-quality users. “We recalibrated the business’ growth strategy to improve the quality and stickiness of our wallet base,” Toriola explained during an investor call. Despite the drop in active users, transaction volumes rose by 4.3% in 2024, suggesting that remaining users are more engaged.

MoMo PSB’s challenges reflect broader trends within Nigeria’s payment service bank sector. These banks were established to promote financial inclusion in underserved areas but have struggled to compete with fintech giants like Opay and Moniepoint, which dominate the market. Many PSBs, including MoMo PSB, have shifted their focus to urban areas where competition is fierce but costs are lower than targeting rural communities.

One key issue is Nigeria’s reliance on banking agents due to limited internet access and low smartphone penetration in rural areas. While MoMo PSB initially built an extensive agent network, it has increasingly shifted towards digital banking services. Industry experts suggest this shift may also be linked to fraud incidents that forced the company to overhaul its operations.

In response to these challenges, MTN’s MoMo PSB is diversifying its services and applying for new licenses that would allow it to offer payment gateway solutions and manage point-of-sale (PoS) terminals. This move aims to reduce reliance on agents while catering more effectively to small businesses and individual customers.

Despite setbacks, MTN remains optimistic about MoMo PSB’s future. The company has invested heavily in the platform, pouring ₦16.4 billion into its development by the end of 2022 and an additional ₦9.4 billion in 2024. These investments are part of MTN’s broader goal of reaching 30–40 million active wallets by 2025.

Looking ahead, Toriola emphasized that user engagement and retention will be key priorities for reversing the decline in wallet usage. With plans to refine its offerings and strengthen its digital infrastructure, MTN’s MoMo PSB is positioning itself for long-term growth despite current challenges.

This reset strategy highlights MTN’s commitment to adapting its approach as it competes in Nigeria’s evolving fintech landscape. Whether these efforts will help MoMo PSB regain momentum remains to be seen, but the company’s focus on quality over quantity may prove crucial in building a sustainable user base.

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