Mobile payment companies are bullish on the prospects for m-commerce.
With the Reserve Bank of India (RBI) doubling the cap on mobile transactions, mobile payment companies are bullish on the prospects for m-commerce — especially in the rural unbanked space.
The RBI recently increased the daily transaction limit for cash transactions from Rs 2,500 to Rs 5,000 and the daily transaction limit for goods and services from Rs 5,000 to Rs 10,000. Companies reason that as the metropolitan users are equipped with card-based payments and the Internet, rural deployment becomes more significant for them. Over 30 per cent of the new mobile subscriptions every month come from villages.
Companies tapping the rural segment are also experimenting with mobile banking through retail points. For instance, Sanjay Swamy, CEO, mChek, says: “mChek is launching a pilot with Grameen Koota, a primarily rural microfinance institution serving over 160,000 members throughout Karnataka.” Through the model, mChek will enable Grameen Koota microfinance borrowers to receive loans, make loans repayments, and also make merchant and bill payments in the local villages.
The pilot projects will eventually be expanded to other microfinance institutions as well as other institutions working with rural customers. “We believe the rural sector in India is more likely to go cashless than the urban sector,” adds Swamy.
Pramod Saxena, Chairman and MD, Oxigen Services India, says: “Around 15 per cent of our deployment will happen in semi-urban and rural areas. We are basically evaluating our banking correspondent model through retail points.” Oxigen has tie ups with ITC echoupal, Drishti and Hughes. And a month back it tied up with e-Mitra (an integrated e-governance project) in Rajasthan and is in the process to roll out services with Haryali Kisaan Bazaar. “We are in talks with MicroSave (a financial services programme) to roll out our microfinance related services,” Saxena adds.
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Besides this, Oxigen is in talks with Railways to bring unreserved (small value, daily tickets) ticket booking services into its offerings. A pilot on this will be worked on in suburbs of Mumbai once Railways approves it.
However, not all are gung-ho over the rural shift. Ajay Adiseshann, MD and Founder, PayMate India, says: “Typically services start urban and then move rural depending on the nature of the service and the markets ability to consume such services. Using the mobile to make payments or for remittances might be a likely scenario in rural areas.”
Dewang Neralla, Director, atom Technologies, says: “We are focusing first on financial inclusion as m-payments will take time in rural areas. We have tied up with National Bulk Handling Corporation for that and are in process of tying up with Kisan Vikas Kendra and other institutions which have rural retail kind presence.”
atom worked on a pilot project for m-payments in Mumbai with Axis Bank. The pilot was done with 30-odd merchants on the list, wherein payments were done with 1,500 credit and debit cards embedded onto mobiles. Naralla says it had a success rate of 95 per cent.