Thursday, July 15, 2010

Mobile Payments

Year 2007 - first trimester of MBA  and a presentation in the area of Information Technology.

Inspired from a Swaminomics article in Economic Times, I had chosen the topic of Mobile Payments. Mobile payments have already been implemented in other emerging economies like Brazil and South Africa. For India, it looked a bit futuristic at that time but the simplicity of it was what attracted me. India had the highest potential keeping in mind the mobile penetration which is in fact still going on on a scorching pace.

The problem with credit cards is that you need a swiping machine, telephone connection et al. This limits its scope. You still need to carry cash if you are travelling by auto, buying groceries from a mandi or paying to your next door mom-and-pop store.

M-payments change things significantly. Both the parties just need a mobile, where in I can transfer the money to your number. Just like a pre-paid connection holds money, this becomes your virtual bank. In any case, if you need cash, you just go to your nearest shop, transfer the m-money and get hard cash from him. Anyone would be willing to do it, making everyone around with some cash as a bank.

And considering the recent focus of telecom companies to target semi-urban and rural areas, it becomes a boon for a city dweller who needs to transfer money to his family back home in a far-away village.

It may have looked futuristic at the time of presentation but within 3 years its time has come . Yes Bank has recently launched mobile money services in Chandigarh (where else ;))

The shot has been fired, the race started. Right now it may be a hurdle race - technology issues, regulatory issues, legal issues. But I am sure in no time this hurdle race is going to become a cross country one - reaching each and every corner.

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