E-money takes new forms | business | Hindustan Times
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E-money takes new forms

business Updated: Dec 15, 2012 02:19 IST
Vivek Sinha
Internet and online transactions

There is a life after plastic in the age of the Internet and online transactions. Time was when credit and debit cards grabbed space from cash. Now, it seems, it is time for plastics to cede space. This time, the wallet has jumped to the mobile handset.

As Internet-enabled phones proliferate at a break neck speed in India, alternatives for cash-less and card-less modes of payment have also multiplied. A bunch of solutions are now available from dedicated e-business firms that allow bill payment options to telecom service providers that provide money transfer services.


The system works through a formal tie-ups with banks under which the website or telecom firms in question provide transaction options for customers. Such transactions have multiplied ten-fold in the past year.

"It is win-win situation for all. Even as the banks save on transaction costs it is convenience, ease and accessibility that makes mobile wallets and mobile money transfers a hit with the consumers," said Kunal Pande, partner at consultancy firm KPMG in India.

Players in the fray include telecom service providers such as Bharti Airtel to technology firms such as Fino PayTech Ltd and Mobikwik.

Lalit Sinha, general manager for alternate channels at the Union Bank of India said a bank spends Rs 50 for each transaction that takes place at its branch. "The bank's transaction cost is negligible if money is transferred through a mobile handset," he said.

The concept of mobile payments is still in its infancy, though. With strict RBI regulations in place newer ways of money transfer are emerging, say industry officials.

So what are the options? Plenty.
In one, you can simply link a bank account with mobile number and get a mobile money identifier (MMID) number which is a seven-digit code along with a mobile personal identification number (mPIN). You can transfer funds from one MMID number to another just like between two bank accounts.
Mobile apps (application software) exist for various banks that offer banking options in simpler formats. State Bank of India has SBI Freedom and ICICI Bank Ltd has iMobile.


Pande explained mobile transfers are a hit with migrant workers employed in major metropolitan cities who remit money to their native villages and towns. There are an estimated 100 million migrants whose remittances are estimated to touch $ 20 billion annually by 2014.

Pre-paid options are also helpful. Airtel Money involves customer deposits that are then used for e-commerce transactions or money transfer over the Internet.