04:14 pm - Friday 19 December 2014

Future of mCommerce Services In India

By Shashi K Singh - Mon Aug 27, 4:43 pm

Use of mobile phone has increased so much that it is not just a device to make calls, but an important medium to fulfill all the financial needs for friends and family. Now, mobile phone technology has made another leapfrog to pave its way for a new trend called mobile commerce where the financial transactions are made using mobile devices.

The new concept has already gained much popularity in the US, Europe, and Africa. In India, though, basic banking transactions and mobile payments are available, but with the increasing use of Smartphone, tablets, latest-applications enabled mobile devices and increasing 3G penetrations in Indian digital market, the mCommerce service is creating its space in the market that can comply with country regulatory guidelines. However, there are future challenges that the industry needs to face.

Following the path of major player Kenya’s M-PESA which has facilitated people mobile banking using mobile devices, in India, RBI and TRAI, financial institutions, operators and service providers have partnered with each other to take mCommerce to rural India. For example, SBI and ICICI bank have partnered with a mobile banking technology partner “EKO” for their mobile banking solutions. Likewise, other banks are also following them.

According to a report by Boston Consulting Group, there is an ample scope for mCommerce in India. At present, India has over 800 million mobile subscribers, including 240 million with bank accounts, and 20 million with credit cards; there are 88,000 bank branches and 70,000 cash points. The additional fact is that the half of Indian households is still unbanked, including 42% holding at least one mobile phone. This opens a great opportunity for mobile phone industry and financial institutions to galvanize mobile commerce services in India.

The latest BCG report has also projected that the fee-based revenue from mobile commerce could be well over $4.5 billion by 2015 in India. Banks, mobile service providers and device manufacturers all have considerable opportunity to generate this revenue.

Let us see some of the mCommerce & mPayments services available in India:

  • Bill Payments – With the mPayment services, paying all types of utility bills such as water, electricity and gas bills has become much more convenient via mobile phone. People can pay their bill from anywhere and anytime via their mobile phone, thereby they do not need to stand in a queue therefore they can save their lots of time.

Recently, xpWallet announced its launch of mWallet Bill Pay offering, enabling users to receive and view bills instantly through the Internet, USSD and SMS (Read Full News Story).

  • Money Transfer – Funds transfer is one of the unique features of mobile commerce services. Previously, people would require going online on a computer to transfer the funds between one to another bank account. Now, one can easily send money to anyone, anywhere; or transfer money between bank accounts through mobile devices within a few seconds.
  • Retail Transactions – With the rise in shopping malls and retail stores in India, mCommerce & mPayments services are extremely valuable for customers for making payments at the checkouts. Additionally, these services also make online shopping much easier and lucrative for both the customers and merchants through various discounts and loyalty coupons.
  • Movie Ticketing – Mobile commerce services also enable users to book movie tickets via a mobile phone. Now, people can enjoy watching movies by planning for that anytime in an easier and hassle free manner.
  • Travel Ticketing – Now, scheduling any trip to anywhere and anytime has become convenient with the mCommerce services available in India. People are now able to book train or flight tickets via their mobile phone and have the pleasure of the journey.

It is evident that mCommerce and mPayments services have significantly been building its market in India; and in the near future it will grow rapidly. There are some obstacles such as security of financial transactions and speed of user interfaces. Another major obstacle to m-commerce in India is meeting the Know Your Customers (KYC) norms. Though, following Kenya’s National ID system which propelled its m-commerce to a huge success, if India gets its Unique Identity Development Authority of India (UIDAI) or Aadhar project successfully implemented, mobile commerce will rise in India to become the next generation mCommerce for its mass adoption.

In conclusion, mobile commerce will certainly be successful in India, but telecom companies and banks do need to spend more to provide safety and security from intrusions and hacking. Further, they also need to build awareness among the consumers by embracing the technology and promoting it ingenuously.

xpWallet next generation mCommerce ecosystem offers both core and enterprise mCommerce platforms to deliver services to the masses of India. USSD mCommerce platform, for instance, acts as a comprehensive tutorial to teach the basic mobile phone users how to access mCommerce services and allows them to do financial activities even without Internet access.

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