Mobile Payment : The Power of M

So far limited to basic banking transactions, purchase of travel tickets, and
payment of some utility bills, mobile commerce is finally taking off with banks,
cellular operators, and payment service providers coming together to find
solutions that comply with regulatory guidelines. Security, a prime concern with
banking regulators, has been a hindrance to the growth of mobile commerce
services such as mobile wallet, which helps make payments at retail outlets
through text messages or Internet-enabled phones. The RBI, for one, had
initially issued guidelines against creation of the mobile wallet. However, now
the RBI has given the go ahead. Also, an increasing number of payment service
providers are being certified as compliant with the latest Payment Card
Industry, Data Security Standard (PCI DSS) which is gradually addressing
security woes. Research also indicates that mobile payments today forms the
lowest cost of transaction and hence will bolster financial inclusion. It can
play a significant role in expanding electronic transactions thus fulfilling
objectives of reducing cheque based transactions over a period of time.

According to Gartner, mobile payment is a service at an early stage and is
expected to extend from 32.9 mn users in 2008 to 103.9 mn users in 2011 on a
worldwide basis. Asia Pacific has the highest mobile payment users with a
projected 28 mn users in 2008, accounting for 85% of the total worldwide users
in this category. The increasing uptake of 3G services is also expected to boost
the mobile payment market. Gartner states that SMS is the dominant mobile
payment technology today, driven by mobile money transfers, and it will remain
the dominant technology until 2011.

m-Payment Providers

Californian mobile payment service provider, Obopay, and Bengalurus mChek
India Payment Systems are among a fast expanding breed of mobile payment service
providers. Obopay, for instance, has a debit card like model in place where the
wallet is not created, but the customers bank account itself is linked with the
mobile phone. Nokia recently invested $70 mn in Obopay which is slated to change
the dynamics of the m-payments space. Nokia may also launch handsets with
in-built default Obopay applications and might showcase Obopay as its preferred
payment partner for its much awaited Ovi online media portal. mChek India,
meanwhile, has focused on a broader reach for its offerings and has created an
interesting m-payment ecosystem through its customers and partners. Bharti
Airtel, one of the first telecom players to partner with mChek has announced
that more than 1 mn users have registered for the mChek payment mechansim on
Airtel services since its commercial launch in June 2008. The new features
introduced for all mChek users on Airtel are mChekMalla mobile mall on WAP and
Java environments. Now mChek has expanded its services to include insurance
premium payments for ICICI Prudential, payments for the Delhi-Gurgaon toll
plaza, and payments at e-commerce websites such as Indiatimes shopping,
Yatra.com, BookMyShow.com, and redBus.in for bus ticket booking. PayMate,
another key player in the m-payment market has partnered with The MobileStore,
Indias largest telecom retailer, to offer Point of Sale solutions across its
1,300 stores in over 200 cities. Another well known payment solutions provider,
Atom Technologies, has introduced IVR based mobile payment solutions and has
partnered with Hypercity Argos, Seventymm, Dish TV, and ICICI Prudential.

Banks too are not far behind in tapping this market, with ICICI Bank being
the first in making its entire Internet banking service available on mobile
phones in early 2008. Standard Chartered Bank recently launched a service that
allows a customer to transfer money across the country from an ATM to anyone
with a mobile phone. Reliance Communications and HDFC Bank have come together to
offer Reliance mPay credit card. PSU banks such as Bank of India and Union Bank
of India are in the process of launching m-banking and m-payment services.

Priya Kekre

priyak@cybermedia.co.in