Comments
Mobile payments are gaining traction in the country. Latest data show there has been a 15-fold increase in immediate payment service (IMPS) amounts transferred using mobile phones between September 2012 and July 2013, as well as a seven-fold rise in the number of transactions. Seventeen million of the 870 million mobile phone users in India now access banking services through their mobile phones.
While transactions worth Rs 26 crore took place in September 2012, this quantum rose to Rs 408 crore by July 2013, according to a Deloitte report, titled ‘M-Banking and M-Payments: The Next Frontier’. The number of transactions has also shot up from 94,000 to 7,01,000.
According to the report, the introduction of IMPS has been the biggest driver of mobile payments since the RBI gave the nod for transactions over mobile phones in 2005-06
IMPS, a catalyst
The data indicate that IMPS, which was launched in India in November 2010, is finally beginning to gain acceptance among cell phone users. The facility is provided by the National Payments Corporation of India (NPCI) through the national financial switch. IMPS offers instant, 24x7 inter-bank electronic fund transfers through mobile phones in a secure manner.
The volumes are expected to rise further. Recently, the NPCI launched person-to-person and merchant transfers, as well as technology to enable service providers to send automated alerts to their users — on BSNL and MTNL connections.
With over 870 million customers at present, the telecom industry has seen high growth over the past decade. And, the growth is not just in urban areas, 40 per cent of rural India has jumped onto the mobile phone bandwagon. While initially the services were limited to communication, entertainment and information, innovative mobile applications have extended the potential of mobile phones to areas such as governance, commerce and health. The financial services sector also recognised the opportunity presented by permeation of mobile phone services. But the stakeholders are still calibrating the consumer proposition and service delivery mechanism to tap this huge potential.
Regulatory regime
The regulatory environment, too, needs to be tweaked to give a push to mobile-based payments, which are dwarfed by the quantum and volume of cheque-based payments, as well as Internet transactions that take place on a daily basis.
Lack of awareness about mobile payments as also the absence of a standardised and easy-to-use service — service providers adopt different routes for offering IMPS — are stumbling blocks.
Consequently, it is often impossible to transfer money to a user or merchant using a “wallet” provided by a different service provider. Another hurdle is the lack of trust in digital money, with people worried about security, privacy, speed and transparency of usage charges.
What is more, once money is loaded or received through mobile devices, there are limited facilities that enable cash withdrawal. To boot, there is a limit on cash withdrawal.
> arvind.jayaram@thehindu.co.in
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.