Till a few years ago, Sachin Dhaval had to visit the collection centre of SUMUL, the Surat-based milk co-operative, to pay cash a day in advance for placing his orders. Now with mobile money, Dhaval can pay directly to the co-operative, thereby saving on time and cost.
Based on similar success stories such as SUMUL, operators including Airtel, Vodafone, Idea and Aircel are now betting big on mobile money to cash in on the growing business opportunity. Besides, the government is also likely to provide incentives for m-commerce to promote financial inclusion and Prime Minister Narendra Modi’s Independence Day speech may contain cues about the same, sources in the IT ministry said. The recent draft circular by the Reserve Bank of India — Payments Bank — also supports the use of mobile money.
One can pay bills, transfer cash and even shop at certain outlets using mobile money. The user needs to have a registered mobile phone account with any network operator in the country and a bank account. He will then need to register for the mobile payment service with the bank (see graphic).
“With the nearest electricity bill collection centre being 15-20 km, a number of people in villages across India are paying bills using Airtel Money. Infact, residents now recharge mobile and DTH connections also using Airtel Money,” a Bharti Airtel spokesperson said. Aircel Smart Pay, for instance, is available in Delhi, Mumbai, Kolkata, Chennai, Coimbatore and Jaipur with 2,000 retail points servicing customers for remittances and bill payments. “We have seen a very good response to our offerings…but customer education will be key to success,” a company spokesperson said.
Among others, Idea Cellular has tied up with Axis Bank for “Idea MyCash” that offers basic banking services such as cash transfer. Vodafone has a similar arrangement with ICICI Bank in the form of “M-Pesa”.
Indian telcos are, however, far from African nations where mobile money has taken off in a big way, with regulatory and policy support. According to a study by the Boston Consulting Group, mobile banking is likely to open up a $390-billion (Rs 23.7 lakh crore) market in India by 2020 from the less than $150 billion (Rs 9.1 lakh crore) at present.
With a majority of the population still outside the banking net, mobile banking presents a huge opportunity in a country like India. The increasing penetration of smartphones is likely to further boost m-commerce.
Service providers are already eyeing a huge opportunity.
“With ‘M-Pesa’, Vodafone in a tie-up with ICICI Bank has become the largest business correspondent in the country with over 65% rural penetration,” said Suresh Sethi, business head, mPesa Vodafone India. The service is available across India with over 65,000 agents and more than 1.4 million registered customers as of 2013-14.