MTN Nigeria recovers over half of lost funds after mobile money service glitch

MTN Nigeria, one of the largest telecom providers in the country, has managed to reclaim over half of the ₦22 billion ($55 million) it lost due to a glitch with its Mobile Money (MoMo) service in May 2022. The technical issue occurred just a week after the service’s launch and underscored the high volume of fraud in Nigeria’s financial services sector.

As of now, the company has recuperated ₦12.5 billion ($7.85 million), however, the outstanding ₦9.5 billion ($5.97 million) will be covered by MTN Nigeria due to an agreement around shared service costs between the telecom provider and MoMo service. According to a statement in its 2023 financial report, MTN Nigeria has fully accounted for this amount.

MoMo service is still in the adoption phase in Nigeria, as reported by TechCabal. MTN Nigeria’s CEO, Toriola, stated in the 2023 full-year report that MoMo’s development has been slower than expected due to delays in regulatory approvals from the Central Bank and the incapacity of many potential customers to fulfill the National Identification Number (NIN) requirement for Know Your Customer compliance.

Despite these challenges, Toriola expressed satisfaction with the progress in expanding the MoMo PSB wallet base. Active users per month went up from 3.3 million in the previous year to 5.3 million, backed by 326,000 MoMo agents and 324,000 merchants within its system.

MoMo PSB aims to grow its reach further through consumer education and leveraging its distribution network. The fintech also plans to provide cross-border remittance services to enhance service adoption and monetization. As per Toriola’s comments, they hope to utilize the positive results of Q4 to speed up wallet growth and adoption of services while expanding their merchant ecosystem.