Airtel Payments Bank (APB), which turned profitable in the September quarter, plans to double its countrywide business correspondents (BCs) network and also drive monetisation through a combination of transactions and interest-based income besides boosting revenues from cash management services in the B2B space, senior industry executives aware said.
“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.
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.