MoMo PSB Lost 2.5 Million Users in 2024 – What Went Wrong?
Was this just poor execution, or was there a bigger play at hand?
At one point, MoMo Payment Service Bank (PSB) looked like it was on track to dominate Nigeria’s mobile money space.
MoMo, which is a subsidiary of MTN, the country’s largest telecom provider, had grown to millions of users, hundreds of thousands of agents, and a growing network of merchants using its platform shortly after its launch in 2020. But by the end of 2024, things had taken a sharp turn.
MoMo PSB dropped from 5.3 million users to 2.8 million users in a single year. Its agent network shrank by 79%, merchants using the platform fell by 77%, and the total amount of cash deposits from users was slashed in half, sinking from ₦7.6 billion to ₦3.8 billion, per the company's report.
MTN’s Explanation: A “Deliberate” Strategy Shift?
It’s the kind of drop that usually signals trouble—loss of trust, operational issues, or fierce competition. But MTN’s leadership insists that this wasn’t a failure, but a deliberate shift in strategy.
According to CEO Karl Toriola, MoMo PSB wasn’t just focused on growing user numbers anymore. Instead, it was “recalibrating” to focus on quality over quantity, prioritizing engaged, active users rather than millions of dormant wallets. The numbers seem to back this up—while user count plummeted, transaction volumes grew by 4.3% in 2024, suggesting that those who stuck around were using their wallets more than before.
Why Did MoMo PSB Struggle?
Even so, losing millions of users is never a good look, and MoMo PSB now faces an uphill battle in a market that’s more competitive than ever. When it launched in 2022, it was expected to be a major player in financial inclusion, providing banking services to people in areas where traditional banks had little presence. But it quickly found itself competing with fintech giants like Opay, Moniepoint, and PalmPay, which have built massive user bases by offering a wider range of services, including loans—something MoMo PSB isn’t legally allowed to do under its payment service bank license.
Another challenge has been the role of banking agents, who are crucial in Nigeria’s mobile money sector, especially in rural areas where smartphone penetration and internet access are low. MoMo PSB initially built one of the largest agent networks in the country, but in 2024, it dramatically reduced its reliance on them. While the company hasn’t given a clear reason for this, some industry experts believe it could be linked to fraud concerns or a shift toward more digital banking services instead of agent-led transactions.
What’s Next for MoMo PSB?
Despite the losses, MTN hasn’t given up on MoMo PSB. The telecom giant has invested billions into the platform, pouring in ₦16.4 billion by the end of 2022 and adding another ₦9.4 billion in 2024 after acquiring full ownership. MoMo PSB is now looking to expand its services, applying for new licenses that would allow it to act as a payment gateway provider and manage point-of-sale (PoS) terminals. These moves could help it diversify its revenue streams and compete in a fintech landscape where just offering mobile wallets isn’t enough.
The real question now is whether this reset will pay off. MoMo PSB still has its sights set on reaching 30–40 million active wallets by 2025, an ambitious goal considering the setbacks of the past year. If it can rebuild its agent network while strengthening its digital presence, it may still carve out a dominant spot in Nigeria’s mobile money market. But with fintech competitors moving fast and customer loyalty never guaranteed, it has a lot of ground to make up.
Kelechi Edeh
