UBA, Redtech, MoMo PSB expand cardless payment access

Nigeria's payments ecosystem is undergoing a structural shift. United Bank for Africa (UBA), Redtech, and MoMo Payment Service Bank have announced a landmark interoperability partnership that democratizes cardless payment access across merchant networks—a move that addresses a critical gap in Nigeria's digital commerce infrastructure and signals the maturation of the country's fintech settlement layer.

The "Pay with MoMo" initiative allows MoMo PSB customers to transact directly from their digital wallets at UBA-affiliated merchant locations without requiring a physical card or traditional bank account linkage. This is not incremental innovation; it is systemic. In a market where 40% of the adult population remains unbanked and mobile money adoption exceeds traditional banking, interoperability is the infrastructure that enables financial inclusion at scale.

## Why Does Cardless Payment Interoperability Matter for Nigeria's Economy?

Nigeria processes approximately $23 billion in annual digital payments, yet merchant fragmentation remains endemic. Before this partnership, a MoMo customer visiting a UBA partner merchant faced friction: wallet-to-card conversion, settlement delays, or outright incompatibility. The partnership eliminates these friction points by enabling direct wallet-to-merchant settlement, reducing transaction costs and expanding addressable customer bases for both parties. For the Central Bank of Nigeria's cashless policy—which targets 80% digital transaction penetration by 2026—this is a validation point: the private sector is building the rails government mandates.

## How Will This Partnership Reshape Merchant Adoption?

UBA operates Nigeria's largest merchant acquiring network, with over 200,000 active points of sale. MoMo PSB, launched in 2021, has captured 8+ million active users through aggressive mobile-first acquisition. When you combine UBA's merchant density with MoMo's user base, you create a network effect: merchants gain access to a pre-qualified customer segment without additional POS investment; MoMo users gain transactional freedom at premium retail locations. This is the playbook that drove Mpesa's dominance in Kenya and M-Pesa's scaled adoption across East Africa.

Redtech's role is critical but less visible: they provide the API infrastructure and tokenization layer that makes cross-wallet settlement possible without exposing sensitive customer data. In fintech, interoperability is only viable when backend plumbing is secure and compliant. Redtech's involvement suggests this partnership meets CBN's regulatory standards for payment system operators.

## What Are the Investment Implications?

The partnership signals institutional confidence in Nigeria's digital payments runway. UBA, as Nigeria's largest listed bank, has been aggressively pivoting toward fintech revenue streams (their USSD and mobile channels now drive 60%+ of transaction volume). A successful cardless rollout adds transaction velocity without capital expenditure—margin-accretive for the bank.

For fintech investors, this is validation: PSBs (Payment Service Banks) are no longer payment peripherals—they are payment infrastructure. MoMo's growth trajectory and regulatory standing suggest the PSB model is durable, not a regulatory placeholder.

Risk: regulatory changes could mandate different settlement protocols or impose interchange fee caps, compressing margins for all parties. Monitor CBN communications closely.

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