Tag: sunil mittal

“Over the next 12 months, APB is looking to double its pan-India BC network to 1 million (from the current 0.5 million level) to gain the necessary reach to cater to the remittances market and the Aadhaar-enabled payment services business to serve millions of potential consumers in the Tier 3 and beyond markets,” one of the executives cited told ET.

Analysts expect the upcoming expansion to further widen APB’s total distribution reach, which is already twice that of the total ATMs and bank branches in the country, and in turn, consolidate its leadership in the remittances market.

At press time, Airtel did not respond to ET’s queries.

Airtel Payments Bank turned PAT-positive in the September quarter, on the back of a 16% sequential growth in its monthly transacting user base to 31.2 million and a 25% on-quarter jump in its gross merchandise value (GMV) to Rs 32,100 crore. Its revenue is close to Rs 1,000 crore on an annual basis.

Company insiders estimate the remittances market to grow at 70% over the next few years and the Aadhaar-enabled payment services business to grow by over 45% compounded annually over the next four years.

IIFL Securities sees strong revenue generation potential in the B2B segment by way of cash management services, especially since APB’s take rate at 0.74% is the highest in the payments banking space. The take rate is a metric to measure conversion of ABP’s GMV into revenue.

Bharti Airtel managing director Gopal Vittal had recently said that the “growth of e-commerce is slated to boost demand for cash management” from the telco’s payments banking arm,” and that whopping “$100 billion in cash is digitised monthly (at an industry level) with cash management charges estimated at between 0.5%-1% of the collections amount”.

Airtel, though, declined to comment on the telco upgrading its payments bank licence to that of a small finance bank in future to enter the lending business and attract larger deposits. Whenever that happens, APB will be able to use deposits from its 115 million users more profitably, say industry executives.

Last December, Bharti chairman Sunil Mittal had said Airtel may upgrade its payments bank licence to that of a small finance bank at some point to enter the lending business.