(Bloomberg) --

MTN Nigeria expects an initial falloff in airtime purchases through banks due to the implementation of a new pricing framework put in place to resuscitate a lucrative payment service disrupted by a dispute with lenders.

Under the new structure which started in July, each transaction is billed at 6.98 naira ($0.02) as agreed with banking and telecommunications regulators in the West African nation. The use of USSD channels by customers should normalize after a few months, MTN Nigeria Chief Executive Officer Karl Toriola said on an investor call, Monday.

Lenders cut the telecommunications giant off from their platforms in April, after MTN reduced commissions by almost half and requested to be paid a backlog of bills charged by the banks for the service.

Nigerian banking and communication regulators intervened to reinstate the 4.5% commission for banks on airtime purchased through them.

“We have started invoicing and started receiving some payments from the banks,” but “it would take a few years to recover the historical costs,” Toriola said. About 50% of MTN’s airtime recharges come through electronic channels, he said.

A recent announcement by the Nigerian central bank that it will not issue mobile money licenses to telecommunications operators is not new and does not affect MTN’s super-agent license nor its request for payment-service bank license, the CEO said.

The “payment service bank will enable us to pursue a fintech strategy, leveraging on our super-agent network,” he said. “With the license we can provide all services permissible under the mobile money operations license and more, which include deposit taking, investment in government securities, cross border personal remittances, and electronic wallets.”

MTN Nigeria PSB license is yet to be approved by the Central Bank of Nigeria.

The Johannesburg-based company is currently focused on relationship management with public authorities to change the perception of MTN as a “foreign value extracting entity” to a localized firm investing sustainably in the future of Nigeria, the CEO said.

(Updates with MTN Nigeria localizing strategy in ninth paragraph.)

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