First, a recap of telecom/debit card data: India has 700 million+ mobile subscribers, just 240 million individuals with bank accounts, 20 million credit cards, 88,000 bank branches, and 70,000 ATMs. Of the households without a bank account, 42 percent have at least one mobile phone.
Mobile banking could be a game changer and while we have been hearing of this for quite sometime, it’s also important to note that very recently, transaction limit for mobile wallet card was increased to INR 50K and as per latest report by BCG, Mobile banking in India is set to generate fee-based income of Rs 20,250 crore over the next five years, mainly driven by lower transaction cost, favourable regulatory environment and UID project.
By 2015, $350 billion in payment and banking transactions could flow through mobile phones, compared with about $235 billion of total credit- and debit-card transactions today. This forecast is based on a recent analysis conducted by The Boston Consulting Group and depends on the willingness of banks, telecom operators, regulators, and consumers collectively to embrace this form of payment.
It is far less costly to offer banking and payment services using mobile technology than to build new branches in a country that, outside of major cities, is still largely rural. As mobile-money initiatives take shape, the projected fee income in India from mobile payment and banking transactions could exceed $4.5 billion by 2015. That amount is less than it might appear. These fees will be shared by banks, telecom operators, device makers, and service providers. [BCG]
Mobile Money & The Indian Market
Mobile banking is a tale of two metamarkets in India: rural and urban. Over the next five years, Unbanked rural markets could begin to rival the urban market in size. In urban areas, many consumers have bank accounts but still rely on cash for 90 to 95 percent of small-ticket transactions. Mobile payments would be a tremendous convenience for these consumers.
» Latest on Mobile Banking in India:
Mobile Banking: Nokia Partners with Union Bank of India
Airtel Gets RBI’s Nod for Mobile Payment Service [First Step to Mobile Currency]
Nokia Mobile Money Transfer Services In India [Complete Details]
SEBI mulls Mobile Trading, RBI Increases Daily Transaction Limits [mCommerce Boost]
The mobile banking industry in India is ready to take off, especially with the ecosystem players – i.e. operators, banks and mobile manufacturers coming together and launching pilot services, though the bigger question is are these services planned keeping ‘consumers’ at the center, or is it just about proof of concepts?
What’s your opinion?