Mobile money services, which enable banks to reach rural customers through mobile technology, are set to reach 20 crore users worldwide in the next two years.
According to the latest analysis from Juniper Research active mobile money users will increase, in the short term due to the need for many people in developing nations to access basic financial services.
Currently, there are 100 million users of these services in the world, though there are none in India.
However, with Airtel and SBI, and ICICI and Vodafone, having joined hands to offer mobile banking services, this sector is set to grow much faster.
India did not see much action on this front as regulations were earlier unfavourable, but now RBI permits mobile banking and the industry is prepared to cash in the opportunity.
India has a huge un-banked population with almost 41 per cent people lacking a bank account, and the government is keen to get this population into the organised banking fold — a sector that is expected to grow at a pace rivaling the growth of the mobile phone industry.
With India’s population of more than a billion, and the country’s GDP growing at more than 8.5 per cent per annum, there will be huge demand for financial services and considering the vast geographies, mobile will be the platform to meet this demand.
It would not be surprising if actual growth of mobile money services exceeds projections by a huge margin. A lot will depend on how various stake holders perform their roles.
While the industry has welcomed the regulation by RBI, it has said that restrictions such as the limit on transaction amount need to be relaxed in a phased manner.
Some players have also critised RBI for not allowing mobile service providers to function as banks. Under current regulations service providers can only act as agents to banks. Industry experts feel that this makes the service expensive as banks and service providers have to share revenue. However, most players feel that there is a big enough market that can sustain multiple players.
The stage seems set for these services to be launched, and it will be interesting to see how the masses take to them.