Airtel is also getting into banking in Africa
Bharti Airtel runs a wholly owned banking subsidiary in India called Airtel Payments Bank. The company has paid good returns to Airtel as it is now profitable. We rarely see any banking or finance startups in India becoming profitable as quickly as Airtel Payments Bank.
Airtel Africa, majority owned by Bharti Airtel, recently launched SmartCash Payment Service Bank. It is a 100% banking subsidiary of Airtel Africa.
The SmartCash Payment Service Bank can issue debit and prepaid cards to consumers and facilitate payments and other banking services in Nigeria. The newly launched banking subsidiary has received its license from the Central Bank of Nigeria and is headquartered in Lagos.
What will the SmartCash payment service bank owned by Airtel Africa do?
Segun Ogunsanya, CEO of Airtel Africa, said the new bank will offer consumers both mobile banking and financial services, resulting in last-mile connection to the financially excluded. According to data shared by Financial Services in Nigeria, 36.8% of the adult population is unbanked. This marks an opportunity for Airtel Africa to step up and make an impact with its financial services.
Airtel Africa can certainly learn from Airtel Payments Bank’s business model, which has led the company to become profitable in a very short time.
There are many things SmartCash Payment Service Bank will need to do if it wants to make an impact. First, the company will need to communicate why it is a more convenient option than traditional banks. Second, the company will have to tell consumers how secure the mobile experience would be. Third, in Nigeria, offline retail presence would play a major role in the rapid expansion of brand and business. Airtel Africa can certainly make the SmartCash payment service a profitable entity, just like Airtel Payments Bank, if the company can execute things the right way.