Mobile-commerce: expect better payment mechanisms

After listening to songs, playing games, checking mails and of course, making or took calls from your mobile phones, what if you could use it as a credit card as well?

Mobile coupons or wallets, better known as M-wallets, have been in talk since long. But now many value-added service (VAS) providers are hopeful to see such payment mechanisms through mobile phones have become a reality soon.

Some of these providers are expecting it sooner, within the next 18-24 months. "The mobile commerce industry will accelerate in the coming months. It would experience growth with mobile being used as a payment medium, call it a mobile wallet. We believe that regulatory authorities like RBI and DoT will iron out the open issues in the next 18-24 months that have been hindering growth till now," says Mouli Raman, CTO and co-founder of OnMobile, a Bangalore-based VAS provider.

Through a host of value-added services, mobile content distribution, and m-commerce, OnMobile caters to an unspecified number of subscribers in the country. In fact, it has been working with several banks and telecom operators on the possible payment mechanisms.

"We are talking to players like banks and telecom players and working simultaneously on the possible payment mechanisms on mobile phones. But it will still take a long time before it takes off in a big way among the mobile phone users because of a fairly complex economic system in the country," adds Raman. Yet, citing statistics, Raman backs concepts like m-wallets and other mechanisms.

"There are around six million users using 80 million credit cards in the market. While there are 60-70 million bank accounts in India. Although India is a primarily cash economy, these growing numbers show there is a lot of potential to be tapped in m-commerce," says Raman.

The sentiment is echoed by Ajay Adiseshan, Founder and Managing Director of Paymate, another leading VAS player.

"Presently, there are over 165 million mobile users in m-commerce but a lot could happen. Unlike e-commerce which was restricted to a certain number of subscribers, m-commerce is growing in utility, travel and entertainment payments across the country," says Adiseshan.

Paymate was one of the first players to introduce 'SMS-to-buy', the kind of SMS-based payment platform to retail customers for which it tied up with retail players like Future Bazaar, Gold Cabs and Planet M sometime back.

In its move to introduce advanced payment mechanisms through mobile phones, OnMobile has introduced utility, travel, entertainment and assisted payments to certain clients wherein the user can himself key in his credit card numbers instead of giving it to a call centre executive, thereby ensuring safety of payments.

Raman is hopeful that 5-7 per cent of such utility payments will be done through mobile phones in the next two years, with an average utility payment of Rs 900 per user.

According to Nitish Mittersain, CEO of Nazara Technologies, a mobile entertainment company, prepaid cards with stored-value for other payments could be one possibility in future.

"The industry is still discovering other payment options while m-wallets are just one possibility. Although prepaid cards with stored-value is one option, I am sure there could be other ways," feels Mittersain.

"Whether m-coupons, m-wallets or any other payment mechanism, we will have to toe the line with the regulatory bodies," sums up Adiseshan.