Airtel Payments Bank is experiencing “strong tailwinds of demand”, and will grow its banking points and deepen product offering range this year, as it looks to raise customer count and average realisation per user, according to CEO Anubrata Biswas. Airtel Payments Bank will also launch its physical debit card for rural banking consumers in September quarter (Q2FY24), having launched it already in urban markets.
“We are experiencing strong tailwinds of demand, and keeping our focus on consumer choice, sustainable model and costs…The opportunity is limitless as long as we stay focused on solving consumer needs and problems,” Biswas told PTI.
The payments bank has grown by a CAGR of 35-40 per cent between mid 2018 and mid 2023, and expects to close the June quarter (Q1) with an annualised run rate of Rs 1,600 crore.
“Today our Average Revenue Per User (ARPU) is in low 20s (in rupee terms), and as our product penetration increases, and cross-sell efforts increase, our ARPU will go up. With 56 million users now, we believe that the scope of digital and financial inclusion in India is a 500 million (user) opportunity, of which 300 million is in rural India and 200 million in urban India,” he said.
Solving the problems of consumers well with banking solution, therefore, offers a huge headroom for growth for the payments bank, he said adding Airtel Payments Bank is now serving the financial and digital inclusion needs of tens of millions of customers across rural and urban India.
“If you grow ARPU and user growth together, we should certainly see if not equal, at least high growth rates from our model,” Biswas said.
It is pertinent to mention here that for FY2023, the bank reported revenue growth of 37 per cent to Rs 1,291 crore, with profits growing by 141 per cent to Rs 21.7 crore.
Airtel Payments Bank, in a statement in May, on the fiscal 2023 performance had said the customer deposits grew by 59 per cent on year to Rs 1,865 crore, powered by “healthy addition” of new users.
“Airtel Payments Bank registered a substantial quarter-on-quarter growth in FY23 revenues, Q4 (Jan-Mar’23) being the strongest with revenues of Rs 379 crore, a 19 per cent sequential growth over the previous quarter,” the company said in its May 18 statement.
The bank recorded growth across all three core business segments, namely the urban digital consumer, the rural underbanked, and industries and businesses.
It registered a strong uptake for its product offerings like digital payments, money transfers, insurance, referral credit, collection management, services among others.
Biswas said going forward, ARPUs will go up as revenue streams get more diversified. “We are launching a physical debit card for our rural consumers which will be stocked at the banking point and distributed. That is scheduled for Q2.”
The physical debit card is being ordered online in urban areas, but in rural areas, where individuals approach the retailer, the banking point will offer the debit card, which can be used for withdrawing money by swiping it at a micro ATM.
“Rural users will feel more confident with the physical debit card,” he explained.
“Airtel Payments Bank is committed to ensuring digital and financial inclusion across India,” he said and pointed out that the model is aligned towards meeting the needs of all Indians, especially if allowed micro credit, which would bring about a transformative impact on the country.
Airtel Payments Bank is a profitable multi-segment fintech operating with a banking licence, offering a range of banking solutions through a network of 500,000 banking points in the country and its digital platforms.
Earlier, the bank has rolled out face authentication for account opening and AePS, debit cards, Micro ATMs. In addition, Airtel Safe Pay, the Rewards123 plan, and the current account solutions are driving substantial traction, according to the company.
