Yes, OPay is a digital bank in Nigeria, but not a commercial bank. Like Kudabank, some expert call it a Neobank and an online bank. OPay is a mobile money payment platform that offers a wide range of financial services including payments, transfers, savings, loans and other essential services like incentive programmes, but it is not a bank like Kuda Bank.
Kuda Bank is a fully licensed digital bank that provides banking services like free transfers, physical and virtual debit cards, loans, and investment options. Although, OPay also offers these banking services but Kuda Bank's main advantage is the ability to invest in shares and make micro-savings plans.
OPay is a popular mobile payment platform in Nigeria that offers a wide range of financial services, but it is not a bank like Kuda Bank. Here are the key differences between OPay and other digital banking platforms:
PalmPay is another typical example of fintech app like to OPay. The mobile money app is redefining the payments experience for consumers and businesses in Africa by making financial services more accessible and affordable.
Like Kudabank, Chipper Cash is another digital bank and Neobank in Nigeria and other African countries. Chipper Cash is an African cross-border payments company that enables payments and financial inclusivity across the continent. The main advantages of Chipper Cash over Kuda Bank, OPay and PalmPay is that the company focus on cross border payment and virtual USD card services.
The key similarities between OPay and other digital banking platforms like Kuda and Chipper Cash are:
- They all aim to provide financial services in a seamless, attractive and rewarding way to both the unbanked and banked population.
- Most offer free transfers, physical and virtual debit cards, savings, and loans.
- They are all focused on driving financial inclusion using technology.
However, the main differences are that licensed digital banks like Kuda provide a fuller range of banking services, while OPay and other fintech platforms are more focused on payments and transactions. But overall, they are all disrupting traditional banking in Nigeria by making financial services more accessible through mobile apps and digital platforms.
About OPay
OPay was founded in 2018 by Opera Software, the company behind the Opera web browser. It started as a mobile payment platform aimed at providing financial services to the unbanked and underbanked populations in Nigeria. The fintech was licensed by the Central Bank of Nigeria (CBN). It is also insured by the Nigeria Deposit Insurance Corporation (NDIC) like other commercial banks in Nigeria, making it more like a digital bank.
OPay Bank services include;
Mobile bankingSavings accountsMoney transfersBill paymentsLoan servicesInvestments and SavingsUSSD BankingHence, we can call OPay a Bank. However, it operates primarily through a mobile app and have no physical location except for the offices and headquarters where banking system operations and management are being managed.
As of 2023, OPay boasts over tens of millions of users, agents and merchants in Nigeria. It aims to serve 1 billion users and 10 million merchants by 2031. The digital bank has also formed partnerships with various financial institutions and service providers to expand its offerings. The company has also explored expansion into other African countries like Egypt.
It's also noteworthy to inform you that OPay has introduced several innovative financial products and services, such as OWealth for investment and OFood for food delivery, enhancing its ecosystem and providing more value to its users. However, many of these products are no longer functioning in every regions of Nigeria.
The Differences between a digital bank and a commercial bank
Digital banks and commercial banks represent two distinct approaches to banking, primarily differentiated by their operational models and customer engagement strategies. Digital banks, such as Kuda Bank, ALAT often referred to as Neobanks, operate exclusively online without physical branches. They leverage advanced technology to provide a streamlined banking experience, allowing customers to conduct transactions via mobile apps and websites.
This digital-first approach enables them to offer lower fees and competitive interest rates due to reduced overhead costs associated with maintaining physical locations. In contrast, commercial banks maintain a traditional structure with physical branches, providing a wide range of services including savings accounts, loans, and investment products, often with a more personalized customer service experience.
One of the significant differences lies in the user experience. Digital banks are designed for convenience and speed, often featuring user-friendly interfaces that cater to tech-savvy customers. They typically provide instant account setup, real-time transaction notifications, and 24/7 customer support through chatbots or online platforms.
On the other hand, commercial banks may offer a broader array of financial products and services, including mortgages and insurance, but their digital banking interfaces can sometimes feel outdated due to legacy systems. This can lead to longer processing times for transactions and a less efficient overall experience compared to the agile services offered by digital banks.
Security and trust also play a crucial role in distinguishing these two banking types. Commercial banks, with their long-established presence, often inspire greater confidence among customers, especially older demographics who may prefer face-to-face interactions.
However, digital banks are subject to the same regulatory standards and security measures as traditional banks, ensuring the protection of customer data and funds. As the banking landscape continues to evolve, many traditional banks are adapting by enhancing their digital offerings, leading to a hybrid model that combines the benefits of both digital and conventional banking, catering to diverse customer needs and preferences.
In a nutshell, is OPay a Bank in Nigeria?
While OPay provides many banking-like services, it operates as a financial technology company, not a licensed commercial bank. Banking services are provided through its licencing and regulatory approvals with regulators like CBN, NDIC and NIBSS and lending companies like BlueRIDGE MFB for offering Loan service.
So in summary, OPay is a very popular and rapidly growing mobile payment platform in Nigeria, but it is not a bank itself. It works with bank regulators and other financial institutions to provide a wide range of digital financial services to consumers and merchants.
