Vodafone India and ICICI Bank are planning to roll out mobile money transfer and payment service in Andhra Pradesh and Kerala.

With this, Vodafone India will cover almost all states in India, thereby enabling people to send, deposit or receive money through mobile phones. “We will launch these services soon in these remaining states,” Suresh Kumar, Operations Director – South told Business Line at the sidelines of the company’s launch of this initiative in Karnataka, where it has 71 lakh subscribers.

Called ‘M-Pesa’, this initiative since its launch in 2007 has met with considerable success in countries like Kenya where people remit money, pay medical bills or buy groceries through a cellphone to the tune of $21 billion annually, according to research estimates.

Vodafone India, along with ICICI Bank is trying to replicate that success in India which has a large number of people who do not have bank accounts. “We have around 17 lakh outlets in a country which has around 1 lakh bank branches,” said Kumar.

In line with this, Vodafone will appoint 50,000 agents to disburse money through their outlets in addition to 660 Vodafone-branded rural stores.

"For millions of people in India, a mobile phone is a bank account, a front door to a micro-business or a lifeline to people in the remotest areas," Marten Pieters, managing director and CEO of Vodafone India told reporters at the time of its launch in India. Research shows that M-Pesa has brought benefits to poor people, such as saving three hours a week and around $3 in money transfer costs.

This ‘M-Pesa’ service can be accessed only by Vodafone customers but need not hold an ICICI bank account. Vodafone is not alone to offer this service. Rival Airtel has a similar offering called Airtel Money. These initiatives come at a time when the Nachiket Mor committee on financial inclusion, recently, set an ambitious goal to provide all Indians with bank accounts by 2016, in a country where only one third of adults have a bank account.

(This article was published on March 30, 2014)
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