Still a Long Way to Go

The RBI licensing regime is also discouraging mobile money growth in the country. The present system allows only e-transfer of money and approves semi-closed prepaid instrument issuance; it does not allow ‘cash out’ from the semi-closed wallet.

As observed in a United Nations study, the telecom and non-bank-led models for mobile payments have witnessed major success in developing economies. It creates a large pool of untapped customers with no access to formal banking services.

The problems with microfinance in India had raised a question: is it too early for financial inclusion in India? And now there is a new question: is it too early for inclusion through mobile phones? As of now, m-wallets in India have a long distance to cover as people still rely on the bank to deposit their money, and are not comfortable transferring money through mobile phones.

Mobile operators are increasingly well-suited to provide secure and simple financial services, and by partnering with banks, they can play a major role in delivering on the government’s financial inclusion objectives.

The new m-wallet platform being built will also work on the Internet. It needs capability to provide Internet-based services also, given that reduction in price points of smartphones and increased availability has led to (their) greater adoption.

In 2011, industry estimates and experts had said that by 2015 anywhere between 200 and 300 million people would be within the ambit of financial inclusion through mobile platforms, but the present numbers have not reached even one-sixth of that. Telecom companies are expecting that once the RBI comes out with the final guidelines, they will be allowed to provide cash-out services without any intervention from banks.