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Airtel To Offer Cash Withdrawal Service On Mobile: Report

It looks like Bharti Airtel is prepping up to enable cash withdrawals via mobile, by partnering with various banks in India, according to a report by Business Standard. We’re not sure if this would be an extension of the company’s Airtel Money service, which is a semi-close mobile wallet. The report mentions that Airtel is currently in discussion with various banks to launch the service under which, Airtel stores will act as banking correspondents, allowing users to transfer money and withdraw cash from their nearest authorised centre. The company is testing the service with Infosys, its technology partner.

While the details of the service and its rollout seem to be sketchy as of now, Airtel’s existing mobile money service, Airtel Money allows Airtel customers to pay utility bills, recharge their phones, shop at merchant outlets and make online transactions using their mobile phones. Customers who have a power account can also make instant money transfers up to Rs 10,000 between one Airtel money wallet to another, and to bank accounts across the country through NEFT (National Electronic Funds Transfer), although they can not withdraw the money physically yet.

It would be interesting to see which Bank, the telco ties up with to act as a banking correspondent, since it’s earlier JV with SBI had fallen through last year. We feel that Airtel will be more careful this time, and avoid any equity participation.

End of the Airtel-SBI JV: In January 2011, Airtel had tied up with India’s largest commercial bank State Bank of India to announce a joint venture to offer customers mobile money transfer, mobile payments and cash-in, cash-out remittances across various platforms like USSD, SMS and Voice in the country. This joint venture also enabled new and existing Airtel customers to open regular and no-frills account and avail of other banking products and services at Airtel’s 1.5 million retailers which will act as Customer Service Points (CSP) across India. Back then, SBI had stated that both the companies were to invest Rs 100 crore in the business and this tie-up will be an exclusive one with the bank not approaching any other telecom operator. However, this joint venture fell through in December 2011, after the Reserve Bank of India (RBI) was reportedly apprehensive about letting a telecom operator enter the banking space through equity participation. Interestingly, RBI had allowed telecom operators to sign up as Banking Correspondents in September 2010, following which Idea Cellular hadsigned a Memorandum of Understanding with Axis Bank to launch MyCash.

Other developments: In September 2011, the mobile payments company mChek was appointed as the corporate business correspondent by Bank of India, to manage its financial inclusion program. According to this partnership, mChek will sign up new customers on behalf of Bank of India, and enable them to deposit and withdraw money, introduce RD facilities, micro credit & insurance, through its designated business correspondents. Before this, IndePay Networks had launched its banking correspondent services in North East India, by tying up with Tripura State Co-Operative Bank Limited (TSCB). Nokia stores had also served as banking correspondents for Union Bank of India’s mobile payments and Vodafone had tied up with ICICI Bank to become its banking correspondent. Although there were a lot of announcements, we don’t see telcos and banks promoting these services aggressively. Nokia Money, which had started advertising the service off late, recently pulled the plug on the service.

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Chart Of The Day: Eko & Banking Correspondent Transactions With State Bank Of India

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