What’s up with Mobile Banking in India?
No matter how you look at it, Mobile banking has failed to pick up in India. The mobile payment space in India is regulated by RBI and governed by the big telcos in the country. H R Khan, the deputy governor of the RBI hinted towards a failure in adoption and at a recent seminar said
The growth rate in the value and the volume of mobile based transaction is much lower compared to the number of bank accounts and number of mobile subscribers
Pushing the envelope for mobile payments in India might seem a little premature as Indians aren’t yet completely confident about paying online via a PC. But the numbers are contrary to this belief:
- In May 2012, close to 3.34 mn transactions were concluded for Rs 2.86 billion through mobile
- In May 2011, Rs 1.28 mn transactions of Rs 0.91 billion were made
This translates to a growth rate of close to 200%. In spite of this, H R Khan believes the rate to be low compared to the number of bank accounts and the huge mobile subscriber base of more than 900 mn.
In what might come as in a bit of a surprise, a recent survey conducted by AICworldwide showed that mobile banking adoption is highest amongst Indians following China [Whitepaper based on a Q1 2012 global study of 4,200 consumers in 14 countries].
Also, on December 22, 2011, the cap of Rs 50,000 on mobile banking was removed in India. This move would be helpful especially when it comes to person to merchant transactions. Talking to Sainath Gupta, the founder at OnMobilePay, he says, “Most of the mobile payment companies that I know are still in market since they were able to raise huge funds and are counting on Mobile commerce revolution in India. Since, market is so fragmented a distinct player can't emerge without which the situation will remain same.”
A rather ambivalent situation, mobile banking is definitely a nut that hasn't been cracked in India, though there are wide possibilities.
