A significant breakthrough in interoperability has taken place in Nigeria’s financial landscape, thanks to a strategic partnership between United Bank for Africa, Redtech, and MoMo Payment Service Bank.
This collaboration paves the way for cardless payments across the country, enabling consumers to make transactions directly from their mobile wallets at physical stores, online platforms, and bank branches—no debit cards needed. Centered around the “Pay with MoMo” feature, this initiative marks a transformative shift towards more inclusive and interconnected payment systems in Nigeria.
Key Players and Their Roles
The success of this initiative hinges on the unique contributions of each partner within the payment value chain:
UBA: Offers a vast network for merchant acquisition, a nationwide branch presence, and extensive distribution capabilities.
Redtech (supported by Heirs Holdings): Provides the payment technology backbone, including RedPay POS terminals and gateway systems.
MoMo PSB (a subsidiary of MTN Nigeria): Brings a large mobile money wallet ecosystem and a substantial customer base.
Together, they effectively close the gap between bank-led merchant acceptance and telco-driven mobile money systems.
How the System Operates
This partnership creates a smooth, omnichannel cardless payment experience:
In-Store Payments
Customers can utilise their MoMo wallets through the “Pay with MoMo” feature.
Payments are processed via RedPay POS terminals within UBA’s merchant network.
Transactions can be verified using phone numbers and PINs.
Banking Integration
MoMo users can easily deposit into or withdraw from their wallets at any UBA branch.
Online Payments
E-commerce merchants can accept direct wallet payments through Redtech’s payment gateway.
This integrated system ensures that users can transact seamlessly across physical retail, banking locations, and digital commerce platforms.
Scale and Infrastructure
The rollout is impressive in terms of both reach and usage:
Over 55,000 RedPay POS terminals have been deployed nationwide. Access to tens of thousands of merchant locations is now available. More than ₦278.47 billion in transactions have already been processed, showcasing the initiative’s impact.
Over 12.23 million transactions have been completed, effectively turning MoMo wallets into widely accepted payment tools that function much like debit cards.
Regulatory and Technology Backbone
Redtech operates under licenses from the Central Bank of Nigeria, serving as both a Payment Terminal Service Provider (PTSP), and a Payment Solution Service Provider (PSSP). These licenses empower them to offer POS services and payment gateway infrastructure, ensuring they meet regulatory standards and maintain operational reliability.
Strategic Rationale: Addressing Nigeria’s Payment Challenges
Nigeria’s payment landscape has struggled with several structural issues, including limited debit card usage, a heavy reliance on cash, and fragmentation between banks and mobile money platforms. Kayode Olubiyi, UBA’s Head of Digital Banking, noted that this partnership directly tackles “gaps in cash transactions and card access,” linking merchants to a wider customer base while enhancing wallet usability.
Redtech’s CEO, Emmanuel Ojo, also stressed the aim of ensuring that no merchant has to turn away a customer due to payment method limitations, aligning with the Africapitalism philosophy promoted by Tony Elumelu.
Omolara Michael-Nwadu, Acting CEO of MoMo PSB, pointed out that interoperability is a key achievement—eliminating friction between platforms and opening up access to thousands of merchant touchpoints.
Benefits Across the Ecosystem
For Consumers:
– Cardless payments via mobile wallets
– Access without needing a traditional bank account
– Ability to transact even with basic mobile phones
For Merchants:
– Access to millions of MoMo wallet users
– Reduced lost sales due to limited payment options
– Increased transaction volumes
For the Financial System:
– Accelerated financial inclusion
– Reduced reliance on cash
– Higher digital transaction penetration
Alero Ladipo, UBA’s Group Head of Marketing, framed the partnership as a commitment to building ecosystems rather than silos, highlighting that collaboration is essential for inclusion.
Interoperability Breakthrough
This initiative is a significant leap toward achieving true interoperability in Nigeria’s payments landscape. Traditionally, mobile wallets and banking systems have operated separately with minimal integration.
This partnership:
– Connects wallet users directly to bank merchant networks
– Enables large-scale cross-platform transactions
– Aligns the interests of banks, fintechs, and telecom operators
It effectively transitions the focus from platform-centric payments to a more customer-centric approach.
Economic and Industry Impact
Digital Economy Growth
– Boosts e-commerce adoption
– Encourages SMEs to embrace digital payments
– Increases transaction speed across various sectors
Competitive Pressure
– Likely to motivate other banks and fintechs to pursue interoperability
– Fosters innovation in payment infrastructure
Regional Expansion
– The partners aim to extend this model to other African markets, leveraging UBA’s extensive reach and MTN’s presence in multiple countries.
Challenges and Considerations
Despite its strong potential, several challenges remain:
– Adoption barriers: Issues with digital literacy and trust
– Infrastructure reliability: Concerns about network downtime and POS performance
– Security concerns: Risks related to fraud and identity verification
– Regulatory evolution: Possible policy changes impacting mobile money
Addressing these challenges will be crucial for sustained growth and building user confidence.
Conclusion
The UBA–Redtech–MoMo PSB partnership signifies a transformative shift in national payments ecosystem, merging banking scale, fintech infrastructure, and telecom reach into a cohesive system.
By facilitating cardless, interoperable, and widely accessible payments, this initiative not only addresses immediate gaps in cash and card usage but also sets the stage for a more inclusive and digitally-driven financial future.
If successfully scaled, this model could revolutionise payments across Africa—where any wallet can make payments anywhere, regardless of platform or provider.
