Agency Report
Airtel Bank Nigeria, a payments service bank launched by telecoms giant Airtel, is set to roll out full operations.
The e-payment service recently deployed Flexcube Universal Banking, a cutting-edge Financial Services application by global software giant, Oracle.
Oracle Financial Services Software (Oracle FS) listed Airtel Bank Nigeria as one of the three new customers for its Flexcube core banking system.
The other two banks listed in Oracle’s Q4 2020 results are located in Thailand and Laos.
The Oracle Flexcube banking software deployed by Airtel Bank Nigeria is the same application used by the Airtel payments bank based in India, the telco’s home country.
The new payment service will rival MTN’s mobile money transfer services – MoMo – launched by Y’ello Digital Financial Services (YDFS) Limited, a subsidiary of MTN Nigeria.
Airtel Nigeria had previously expressed its intention to launch own mobile money platform; as authorities in Nigeria further relax regulations on telecommunications companies delivering banking services.
Managing Director, Airtel Nigeria, Segun Ogunsanya had said the company would apply for a Payment Service Bank (PSB) licence, adding that the company would subsequently launch services designed to drive financial inclusion across its 40 million-strong customer base.
In October 2018, the Central Bank of Nigeria (CBN) had unveiled draft proposals to licence a number of PSBs. The apex bank held that this would improve financial inclusion among millions of Nigeria’s unbanked population; especially in the rural areas.
Under previous regulation, mobile money services need to be supplied in collaboration with a company holding a full banking licence. These licences were only issued to traditional financial service providers. However, under the new rules, telecom operators are eligible to provide payment services through subsidiaries. In addition, the sector will also be opened to other companies meeting a specific range of terms.
The licenses will be issued with a multiplicity of conditions.
One of these is that the majority of operations must cover rural and currently unbanked areas.
This is in line with the CBN’s drive to boost financial inclusion, and Automated Teller Machines (ATMs) and service centres must be established.
In addition, service providers have to offer services through banking agents.
Among the services to be rendered by the mobile money services are domestic and international remittances, deposits and payments.
Others include digital wallets and issuance of prepaid cards.
On the other hand, they are banned from providing loans, foreign exchange trading and insurance services, among others.