Indian banking sector has been prevalent since the time unknown; but the decade-old mobile phone industry has boomed only much recently. However, wireless subscribers have far out-stripped the number of individuals with bank accounts at around 240 million users.
Hopefully, this multi-fold growth in cellular industry provides the much-needed push to the banking sector in the upcoming times, through payment and banking transactions led by mobile phones in India.
Undoubtedly, mobile transaction is a new kid on the block. But, then, does that warrant to say that the value of mobile transactions could soar by whopping 15 lakh times in just around 4 years of time span? Without being conclusive, I leave it on readers to debate on this subject of mobile-banking reach-ability. Here is some number crunching.
The value of transactions from mobile money users so far is only Rs.1.6 crore, hardly equalling the cost of a 3-BHK flat in a mid-tier locality of Mumbai. But, if you take into account the pace of growth in number of mobile banking users that surged from 400 in mid-2010 to 1.1 crore in May 2011 – we get to gauge the emerging prospects that mobile transactions hold for both the cellular and banking industries.
Having said this, there is huge lack of awareness among the customers about the mobile money trail existing in the country, at a time when even the basic online banking is still in its initial stage of proliferation. The most common concern shared by the clients being related to the mobile-banking applications which could put your account information at risk.
On the other hand, a study by BCG points out that the mobile transactions in India are expected to touch $350 billion by 2015; which is likely to provide banks, telecom operators, device makers and service providers an opportunity to earn fee income of $4.5 billion.
With the current mobile payment transactions valued at a miniscule Rs.1.1 crore and the BCG report assigning a ballpark figure of over Rs. 15 lakh crore in next 4 years, it looks almost impossible to envision such a huge surge in value of mobile-banking in the country. What say?
Mobile banking, until recently, was limited to receiving text message with your account balance. But, now, virtually every bank allows their clients to transfer funds, pay utility bills and check bank balances through their mobile-enabled applications.
Even the RBI is looking to promote mobile phones as a medium for taking banking facilities to the remote India for achieving financial inclusion. Moreover, especially in rural areas, it is far more economical for the banks to offer such services using mobile technology than to build new branches.
Already leading Indian banks such as SBI, ICICI Bank and Axis Bank have tied up with telecom operators like Bharti Airtel, Vodafone and Idea Cellular respectively, to offer mobile payment services.
[Note: In most of the places where this news appears, the numbers have been wrongly converted like USD 350 bln has been put as Rs. 1560 cr. where as it really converts to 15.60 lakh crore..]