Managing Director and Chief Executive of Heritage Bank Limited, Ifie Sekibo has asserted that Payments Service Banks (PSBs) will pose no threats, neither will they be considered as competitors when they debut in Nigeria.
Sekibo stated that when payments service banks become operational in the country, they will be partners in the promotion of financial inclusion rather than being perceived to be in competition with traditional financial institutions.
About Payments Service Banks
Payments Service Banks is an initiative of the Central Bank of Nigeria in its bid to further deepen financial inclusion to accommodate the unbanked and help in attaining the policy objective of 20 per cent exclusion rate by 2020. PSBs are envisioned to facilitate high-volume low-value transactions in remittance services, micro-savings and withdrawal services in a secured technology-driven environment.
PSBs include stakeholders in the digital financial ecosystem, such as the Nigerian Communication Commission (NCC), commercial banks, mobile money operators and telecommunication companies.
Competition between PSBs and lender banks
Sekibo explained that PSBs are not lender like traditional banks, their obligation in the financial space is to assist lenders to bridge the gap in financial inclusion through technology.
He, however, admitted that competition will arise in the financial inclusion space, but boasted agency banking products are capable of withstanding the competition PSBs poses when they become operational.
“They are not lending banks. They are essentially going to assist us. For us it is an enabler for the financial inclusion, it is not necessarily a competition.
“Yes, it is competition to the extent that we will compete with them in the financial inclusion space, our agency banking products will compete with their payment platform, but we all have very good payment platforms. For most of us, our payment platforms have developed much more than they could even be able to compete with.”
Benefits of PSBs to lender banks
Despite acknowledging possible competition between PSBs and lender banks in Nigeria, Sekibo stated there’s benefit from the inclusion of PSBs in the promotion of financial inclusion. Adding that there is a need to have organisations that help the lower side of Nigeria’s economy.
“But for us, it is important that we have such other organisations that help the lower side of our economy where people put money under their beds or leave money in their stores and when fire comes, it destroys both the money and their investment and it is back to square one.
“We need to eliminate that; we need to bring in as much people under the formal platform so we can measure them. Today we don’t have good measurement for how much money is in circulation in Nigeria because we don’t even know. But if we can get these new institutions join us to expand the financial inclusion space we believe it is better for everybody and it is better for the economy.”