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 in Nigeria. The digital bank provides banking services like free transfers up to 10 in a month, physical and virtual debit cards from VISA, loans, and savings 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 one of the most popular, household mobile money applications in Nigeria that's offering 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 and alternative fintech apps 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 gives customers free transfers, physical/plastic ATM card & virtual debit cards, savings & investing tools and loans & services features.
- These payment apps are more focused on driving financial inclusion using leveraged technology.
However, the main differences between them are that licensed digital banks like Kuda provide a maximum range of banking services, while OPay and other fintech platforms are more focused on payments and transactions.
But overall, they are all working to disrupt traditional banking in Nigeria by making financial services more easily accessible through mobile apps and online platforms.
About OPay
OPay was founded in 2018 by Opera Group and Software, the company behind the Opera web browser. The company incepted as a mobile payment platform aimed at providing financial services to the unbanked, underbanked and banked 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;
Hence, 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 one billion (1bln) users and 10 million merchants by 2031. The digital bank has also formed alliances with various financial institutions and service providers to expand its offerings. The company has also explored expansion into other African countries like Egypt, Kenya and Ghana.
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 primary approaches to banking. They are most differentiated by their operational models and customer engagement strategies.
Digital banks, such as Kuda Bank, ALAT and Hydrogen are often referred to as Neobanks because they hold a microfinance bank license and operate exclusively online without physical branches.
Digital Banks leverage innovated technologies (Innotechs) to provide a unique and streamlined banking experience which allows their customers to carryout transactions via mobile apps and online through their dedicated websites.
Digital banks, Online Bank or Neobanks (like Kuda, OPAY, PalmPay, Paga, Moniepoint and ALAT that are available in Nigeria), offer lower fees and competitive interest rates because they don't have the expenses of maintaining physical branches. They focus on convenience, speed, and user-friendly apps, providing instant and easy account setup, real-time pop-up or push notifications, and 24/7 support.
In contrast, traditional banks or commercial banks offer a wider range of services like loans, domiciliary account in any currencies and investments, with more amazing, exclusive and personalized service but often slower processing times due to older systems. I hope you can relate when GTBank said it's moving it core banking system to Finacle due to old provider is giving issues.
While commercial banks are trusted by many people in a country, especially older customers, both types of banks are secure and follow regulations. Many traditional banks are now combining digital and physical services to meet different customer needs.
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, among others, OPay is a very well-known and significantly growing mobile money/payment app in Nigeria. It's most recognized by almost every household in the country, however, it is still not a bank. OPAY works with bank regulators and other financial technology companies to provide a vast of digital financial solutions to consumers, merchants, and its agency banking (POS Agents).
