In Part 1, we established the case. Airtime is money. It was purchased with naira, it stores value, it moves across Nigeria's entire mobile subscriber base without exception, and it is already being deducted for financial services by a CBN-backed directive. The only thing missing is the return leg: the ability to convert it back into spendable electronic money within a regulated, affordable framework.

We also established what the unregulated market has done in the absence of that framework. A cluster of airtime conversion platforms has stepped into the gap, providing a service that tens of thousands of Nigerians clearly want, at a toll of between 13 and 30 per cent of face value. In Part 2, we go deeper. We look at who those platforms are, how they actually work, why the telcos have not moved faster to replace them, and what the specific regulatory unlock looks like.

The Grey Market in Detail

The informal airtime conversion economy in Nigeria is larger than most people realise. Platforms like AirtimeFlip, Recharge2Cash, Prestmit, Tingtel, and Eazymobile collectively process millions of naira in daily conversions. Their business model is simple: a user dials a USSD code or opens an app, transfers airtime to a platform-designated number, and receives a cash credit to a linked bank account, usually within minutes. The platform keeps the margin.

What is less visible is how these platforms actually source the cash they pay out. Most operate by aggregating airtime at scale and reselling it to bulk buyers: businesses that need large volumes of airtime for staff rewards, customer promotions, or prepaid service credits. The margin between what they buy from individuals at, say, 75 per cent of face value, and what they resell to bulk buyers at 85 to 90 per cent of face value, is where the business lives.

This is not an unstable model. It is a functioning market. But it is a market that exists because a regulated alternative does not, and it prices in risk, friction, and regulatory ambiguity that a formal system would not need to absorb. The user, as always, pays for the inefficiency of the system above them.

Why the Telcos Have Not Moved Faster

The obvious question, after reading Part 1, is why MTN MoMo PSB or Airtel SmartCash have not simply offered official airtime-to-wallet conversion as a product. They have the subscriber base, the infrastructure, the PSB licences, and a clear commercial incentive. So why is the feature not in every MoMo or SmartCash menu today?

The answer has at least three layers.

The first is regulatory uncertainty. While the CBN's 2021 Mobile Money Framework does not explicitly authorise airtime-as-deposit, it also does not provide a clean framework for regulated conversion. For a licensed PSB operating under CBN scrutiny, launching an unambiguously grey product carries compliance risk that most boards are not willing to absorb until the regulatory position is clear.

The second is commercial tension between the telco parent and the PSB subsidiary. Airtime is the core revenue product of the telecoms business. If MoMo PSB makes it too easy and too cheap to convert airtime into a wallet balance, it potentially cannibalises the telecoms parent's airtime revenue. That internal tension is not hypothetical. It has been openly discussed in investor calls by at least one of the major operators. Solving it requires a deliberate group-level decision to cannibalise one revenue stream in favour of building a larger one, which is the kind of decision that takes longer than it should in large organisations.

The third is the KYC gap. The platforms that operate informally can afford to be lax about identity. A licensed PSB cannot. Regulated conversion would require that the person converting airtime is a verified wallet holder. Given that Nigeria's tiered KYC model allows basic wallets with only a phone number and BVN, this barrier is lower than it used to be. But it still means that the full inclusion dividend of airtime conversion can only be unlocked if unbanked users can be on-boarded to basic wallets quickly and at low friction. That on-boarding challenge is real.

The NIN-BVN Convergence as Enabler

Something has quietly changed in Nigeria's identity infrastructure that makes a regulated airtime conversion framework significantly more viable than it was three years ago. The convergence of NIN and BVN linkage, which the CBN and NCC pursued aggressively through 2024 and into 2025, means that the majority of active SIM cards in Nigeria are now linked to verified identities.

The SIM registration enforcement exercise, which at its most aggressive saw millions of lines disconnected, was deeply disruptive. But it produced a dataset that the financial inclusion argument for airtime conversion now rests on.

If your SIM card is linked to your NIN, and your NIN is linkable to your BVN or a basic digital identity record, then your airtime balance is no longer anonymous value. It is value attributed to a known person. The AML and KYC objections to airtime conversion, which were entirely legitimate when SIM cards were freely sold without registration, are now substantially weaker. The infrastructure for identity-anchored airtime conversion already exists. It was built for a different purpose, but it serves this one.

What the CBN's Next Payment Systems Vision Should Include

The CBN has signalled, through multiple stakeholder engagements in 2025 and early 2026, that a new National Payments Systems Vision is in preparation. This is the obvious vehicle for resolving the airtime conversion question formally and permanently.

The ask is not complicated. It has three components.

First, explicit authorisation for licensed Payment Service Banks to offer airtime-to-wallet conversion as a regulated product, with conversion settled at the PSB's prevailing exchange into the user's wallet balance, subject to daily and monthly limits tied to KYC tier.

Second, a regulated maximum conversion fee, proposed at five per cent of face value, replacing the current unregulated market rate of 13 to 30 per cent. This fee would be shared between the originating telco and the PSB, with the structure agreed at the operator level and disclosed to users.

Third, mandatory interoperability: a user on MTN should be able to convert airtime to their Opay wallet or their GTBank account, not just to MoMo PSB. The same interoperability principles that now govern mobile money transfers should extend to airtime conversion. Without interoperability, you simply replace one walled garden with another.

None of this requires legislative change. The CBN has the power to issue these permissions through existing regulatory instruments. It is a policy choice, not a parliamentary process.

The Competitive Pressure That May Force the Issue

There is a dimension to this story that does not get enough attention: competition. The grey-market conversion platforms are not static. Some of them, Prestmit in particular, have evolved from simple airtime-to-cash services into broader digital asset conversion platforms, handling gift cards, cryptocurrency, and digital value from multiple sources alongside airtime. They are growing, professionalising, and building user bases that increasingly overlap with the customer segments the PSBs want.

If the CBN does not create a regulated airtime conversion pathway, it will not prevent the conversion from happening. It will simply ensure that it continues to happen outside the regulated system, at higher cost to users, with less AML oversight, and with the commercial value accruing to platforms that are not contributing to the formal financial ecosystem the CBN is trying to build.

The window for the regulated players to capture this market is not indefinitely open. Every month that MTN MoMo PSB does not offer a transparent, five-per-cent airtime conversion product is a month that Prestmit and AirtimeFlip are deepening their user relationships and building the switching costs that make regulated alternatives harder to displace later.

The Inclusion Dividend, Quantified

We noted in Part 1 that Ghana's mobile money user base grew by approximately 72 per cent when the regulatory framework shifted to enable telco-led mobile money. Nigeria's numbers are different in scale but the structural logic is the same.

If a regulated airtime conversion product with a five per cent fee were available on all four major networks tomorrow, the addressable market would be every prepaid subscriber in Nigeria who has ever wanted to convert airtime and either used a grey-market platform, asked a friend to recharge them instead, or simply left the value unused. Conservative industry estimates suggest that figure runs into the tens of millions of transactions per month.

The inclusion case, measured in new wallet activations and first-time formal financial service users, is more significant than the revenue case. But both are compelling.

The Question That Remains

Part 1 of this series asked why Nigeria was not yet where several of its African peers already are on airtime conversion. The answer, we argued, is a regulatory posture built for a world that no longer quite exists: an unregistered SIM environment, an immature mobile money sector, and a financial system not yet capable of absorbing the identity and AML challenges that came with it.

All three of those conditions have changed. SIMs are registered. PSBs are licensed and operating. Nigeria's financial system processed 11.2 billion electronic transactions in 2024. The infrastructure that made the CBN's caution rational in 2011 is the same infrastructure that makes it unnecessary in 2026.

The grey-market conversion economy will not disappear on its own. The only question that remains is whether Nigeria's regulators will formalise and capture that demand, or continue to watch it serve itself outside the system, expensively, at the user's cost.

The technology is ready. The identity infrastructure is in place. The precedent is documented across a dozen African markets. The CBN's next payment systems vision is the moment. The question is whether the people writing it are asking the right questions.