Updated: The Airtel Money Super Account powered by Axis Bank does support cash withdrawals in all the four regions where it’s been launched. We had incorrectly interpreted and mentioned that it only supports withdrawals in UP East and Bihar.
We’ve been hearing about Airtel testing its extended Airtel Money Service with Infosys and being in talks with Banks for Banking Correspondent tie-ups for a long time. The telecom company has announced a partnership with Axis Bank, launching ‘Airtel Money Super Account powered by Axis Bank’, which will essentially offer no-frills accounts with the Bank on Airtel’s mobile platform. Infosys, is the technology partner for the launch and has deployed its WalletEdge and Finacle Digital Commerce solutions.
Open wallet: Airtel currently has a prepaid payment system license which allows users to deposit cash into Airtel Money, but they can only use it for payments there after. Because prepaid payment instruments are a closed loop system, they cannot withdraw cash, without a tie-up with a bank.
However, this is not exactly an open wallet, and mainly targets the migrant population from Eastern UP and Bihar, as withdrawals will only be possible in the particular regions. So, if a user in Delhi wants to send cash to another user in the same city or in Mumbai, withdrawals would not be possible through Airtel outlets, even if both have an Axis Bank powered no frills account. Airtel Money users can deposit and withdraw money from any of the four locations – Mumbai, Delhi, East UP and Bihar. Also, the service would require users to submit their KYC (know your customer) documents for identification, in order to open an account. Updated: The KYC documents will be handled and verified by Axis Bank alone. Users will have to pay Rs. 200 for registration of the service, of which Rs. 100 will go into users Airtel Money wallet.
Earlier, Airtel had partnered with India’s largest commercial bank State Bank of India to announce a joint venture to offer customers a similar service. Back then, SBI had stated that both the companies were to invest Rs 100 crore in the business and this tie-up was supposed to be an exclusive one with the bank. 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.
Bank account features: The account will allow users to conduct banking transactions including cash deposit, money transfer and withdrawals, in addition to paying them savings account interest. However, as we mentioned, the focus is mainly on remmitances, as the solutions will be initially offered in the top four remittance corridors involving Delhi and Mumbai on the sending side and Bihar and East UP on the receiving side. The company plans to extend it to other remmitance corridors, in the future. It also plans to introduce banking products and services like micro Recurring Deposits, micro Fixed Deposits, small loans and micro-insurance products, through the platform.
Airtel plans to leverage its distribution network of over 1.5 million outlets, and Axis Bank branches for reaching out to the customer, mainly targeting the unbanked segment. Airtel also intends to offer remittance facility to other bank accounts through NEFT, in the future.
Portability?: Since the service works on USSD code, any Airtel Money user either on smartphone or feature phone can make use of the service. The Airtel Money account is connect to Airtel users’ account via a mpin number. However, the customer’s Airtel number remains the main identification for the service. In case of change in number, users will have to close their previous account and open a new account with the new number. The balance will be credited to their new number if proper documents are submitted.
How mobile payment platforms should work: It’s interesting to note that Axis Bank offers a similar product, MyCash, with Idea Cellular, with remittance facility offered in the Dharavi – Allahabad remittance corridor. So this service is not exclusive. So, what’s stopping telcos and banks to come together and launch a one wallet, multiple banks, multiple services mobile wallet? An Airtel Money customer should have options of multiple banks (wherever he/she has an account) to choose from for depositing money into the Airtel Money wallet, withdrawing money from the Airtel Money account, and also for transferring to another users bank account.
The RBI, with its hesitant and closed (albeit relatively secure) approach to mobile payments is not doing enough. The banks have done precious little to promote mobile payments, and only Airtel has been awarded a prepaid payments license. However, there’s some hope left- the NPCI (National Payments Corporation of India), which offers mobile money transfers on its Interbank Mobile Payment Service (IMPS) platform for 39 banks, is seeking an approval from the Reserve Bank of India (RBI) to make the mobile payments services by telecom companies like Airtel Money and m-wallet services offered by banks, interconnect.