Business & Investment

Explainer: What You Need to Know About Airtel Payment Services Banks

AirtelAfrica Plc has launched banking services in Nigeria as its subsidiary, SmartCash Payment Service Bank Limited (SmartCash PSB), has been licensed to open by the Central Bank of Nigeria (CBN).

Airtel, which released this in a statement on May 19, 2022, states that it currently exists in almost 14 countries in Africa. SmartCash PSB will be tried on the retail touchpoints initially selected and operations will be gradually expanded nationwide over the next few months.

Airtel operates PSB through Smartcash Payment Service Bank Limited, and MoMo Payment Service Bank Limited will be PSB for MTN. Other PSBs are run by Glo and 9Mobile. The report states.

“Bringing the Smart Cash PSB to Nigeria is the beginning of that journey to revolutionize the outlook for Nigeria’s financial services and at the same time support a larger economy,” said Segun Ogunsanya, CEO and Managing Director of Airtel Africa. It says.

“Supporting the further digitization of the economy, and most importantly, by providing current and savings accounts, payment and remittance services, debit and prepaid cards, etc., millions of people who currently do not have access to financial services. Reaching Nigerians is about helping banks that don’t have a bank account. Sophisticated services, “he added.

Smartcash PSB is the customer’s first digital bank aimed at bringing financial services closer to all Nigerians by leveraging its vast distribution network to improve financial inclusion.

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According to Mondaq, payment service banks receive deposits from individuals and small businesses, perform payment and remittance services within Nigeria, issue debit and prepaid cards, operate electronic wallets, and are regulated by CBN. Do other activities.

Therefore, Airtel will provide these services since it went into operation. By doing so, they will join things like OPay and Paga in that space. One of the goals of CBN is to provide financial inclusion to the country.

The World Bank defines financial inclusion as access to affordable financial products and services that are responsibly and sustainably offered. These services include payments, savings, credits, insurance, and transactions.

In addition, having a checking account is the first step towards financial inclusion, as it provides individuals and businesses with a way to receive, transfer and store money.

As a result, telcos does not provide a complete suite of financial services, but can provide users with an entry into the financial system.

An important reason for the optimistic reason shown is that telcos may move forward with CBN’s financial inclusion targets urgently. This is primarily due to comprehensive coverage within the country, especially in rural areas that accommodate the majority of the population without bank accounts.

In addition, MTN and Airtel have the largest and third largest subscribers, with 67.5 million and 42 million, respectively. Even considering multiple SIM cards that are common in the country, these numbers are significantly higher than the top three Nigerian banks on a customer base.

According to data from the Nigeria Interbank Payment System (NIBSS), there are 191 million bank accounts in Nigeria as of December 2021. At the same time, the Nigerian Communications Commission (NCC) reports 197,768,482 active lines as of February 2022.

However, considering that the total number of BVNs as of April 2022 is 54,241,963 and it is not possible to have multiple BVNs, it is safe to assume that the number of bank account holders in Nigeria is about 79 million.

Having successfully set up a mobile money service in other parts of Africa, Airtel was able to recreate its success in Nigeria. This development is a good sign for people who do not have a Nigerian bank account, as it acts as a gateway to the financial services sector. PSBs cannot offer loans, but having a checking account gives users access to loans for business and education.

However, granting a PSB license to a telephone company is only one step towards achieving financial inclusion, and having a bank account is not enough.

The license will help open the mobile money business to 44.4 million Nigerian customers and may involve more than 200 million people.

Mobile money continues to be one of Airtel’s fastest growing services and an increasingly important part of its business, with annual transaction value of $ 64.4 billion, accounting for 11.7% of total revenue for the past fiscal year. Occupy.

Payment service licenses will allow the company to expand its digital products to reach millions of Nigerians who do not have access to traditional financial services.

Further deepening the country’s financial inclusion for the benefit of all citizens and the Nigerian economy as an important milestone in supporting the shared agenda with the Nigerian government, CBN, and traditional financial institutions.

Explainer: What You Need to Know About Airtel Payment Services Banks Explainer: What You Need to Know About Airtel Payment Services Banks

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