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Updated: My Mobile Payments Gets RBI Nod To Launch Money On Mobile

Update: One of our readers, Dinesh, has pointed out that the claims made by My Mobile Payments (as reported by Business Standard) appear to be a little unrealistic, since a daily transaction turnover of Rs 35 lakh would result in the total monthly transaction amount of Rs 10.5 crore, which is extra-ordinary for a new player. We thank him for the heads-up and for giving context.

Mobile payments service provider, My Mobile Payments has received an approval from the Reserve Bank of India (RBI) to offer a semi-closed m-wallet. The company intends to launch ‘Money On Mobile’ an electronic prepaid payment instrument for mobile phones, by December. According to a statement from the company,  it has tied up with 36,000 retailers across 200 cities in India. The service would allow users to pay for prepaid mobile talk time, DTH accounts, air, bus or movie tickets and other services using their mobile phones. The service operates independent of the consumer’s mobile operator or bank, and users will be able to top-up their mobile money accounts through the company’s retail network.

The company already offers the solution to b2b (business to business) customers through SMS and mobile apps, and had claimed to have a user base of 10,000 clients across 15 Indian states, with a transaction-based turnover of Rs 35 lakh per day, in April 2011, according to a media report. It had done transactions worth Rs 18 crore, six months after the launch of its m-payments service. It had announced plans to raise a PE funding of Rs 50 crore to venture into the b2c segment.

A semi-closed wallet allows loading of money into a payment instrument, but cannot be used to withdraw money or for person to person money transfer. Recently, the RBI  had increased the transaction limit from Rs. 5000 to Rs. 50,000, for “mobile-based semi-closed prepaid instruments issued by non-banks” on par with other semi-closed payment instruments. This will certainly benefit mobile payments companies, however the number of merchants that support the platform is crucial.

Other platforms: Others offering a semi-closed mobile wallet include Airtel M Commerce Services Ltd, which offers the Airtel Money service in Delhi, Noida, Ghaziabad, Faridabad, Gurgaon and Chennai. Loop Mobile had also rcently partnered with ZipCash to offer a mobile payments service. While ZipCash had reported 3035 transactions for April 2011, worth Rs 3.36 lakh, Airtel Money, which was only operating as a pilot in Gurgaon had reported 1665 transactions worth Rs 1,56,456 in the same month.

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Boost mobile payments: Perhaps, mobile payments providers need to be more aggressive in promoting these products to see a boost in user adoption. Consumers still find it cumbersome to go to retail outlets to top-up their mobiles for using the amount just for other transactions, which can even be made through netbanking, credit/debit cards or simply cash. They need to incentivize customers, give them discounts or create loyalty programs to encourage repeat use.

Related:

– RBI Ups Mobile Wallet Card Txn Limit To Rs 50k; M-Banking Encryption
– The Digital Prepaid Payments Market In India Is Getting Crowded
– Airtel Money Launches In Chennai; Delhi Next
– Airtel Launches Airtel Money: Prepaid Cash On Mobile; Charges, Transaction Limits
– Airtel Granted License To Offer Cash Card Services In India

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