Vodafone M-pesa ICICI

Update: Vodafone has extended M-Pesa to Haryana, with 1073 agents, and 110 Vodafone stores.

Jan 2nd 2014: Vodafone has launched its mobile payment service M-Pesa in Gujarat and is all set for pan India roll out this year, reports The Hindu. The telco had launched the service in India in 2012 along with ICICI bank and has since expanded operations to 11 circles — Delhi, Mumbai, Kolkata, West Bengal, Bihar-Jharkhand, Rajasthan, UP East, UP West, Maharashtra & Goa and Assam & North East.

In India Vodafone has 300,000 registered customers and 30,000 agents according to H1FY14 results posted by the company and currently charges between 1.2% and 1.5% of the value of transaction.

When the service launched in Delhi, it was available via 1,400 authorized agents and across 130 Vodafone exclusive retail outlets, while in Mumbai, the service was available via 1,400 authorized agents and in Uttar Pradesh (East), it was launched with 5,500 authorized agents. M-Pesa allows consumers to deposit and withdraw cash from outlets, transfer money to any mobile phone in India, and remit money to any bank account in the country. Apart from transferring money, there are consumer payment services as well, allowing mobile account recharges, utility bill payments, and apparently even shopping at select shops.

Note that until users are verified and KYC norms complied with, cash withdrawals and money transfer services are not allowed. Vodafone currently has a license for a semi closed wallet from the Reserve Bank of India, through its subsidiary MCSL (Mobile Commerce Solutions Ltd) and the company offers the service through this subsidiary. Having a separate company (MCSL) to run the payments business also allows Vodafone to avoid payment of government license fee charges on telecom revenues. Airtel did the same with Airtel Money, for which they also got a prepaid payments license through its subsidiary Airtel M Commerce Services Ltd (AMSL).

Competition: Airtel too has a similar service in which grew 10 times to Rs 654 crore a quarter in Q2-FY14, from Rs 69 crore in same quarter the previous year. Note that this is the amount transacted during the quarter ended 30th September 2013. The subscriber base increased 168.5% year on year to 1.4 million subscribers in Q2-FY14, with a total of 23.7 million transactions being executed. The average value per transaction was Rs 276, which is significantly higher than the voice ARPU of Rs 160.35. Airtel Money is currently live in 27 states in India.

Tata Docomo will be expanding its mRupee service to cover 26 Indian cities by the end of this fiscal (FY-14). The service is currently available across 1,700 retail outlets in 11 Indian cities and was launched by Tata DOCOMO in partnership with ICICI Bank in 2012. The service allows users to walk into any MMP retail outlet to deposit the cash and provide details of the payee, following which the money will be transferred to the bank account of the payee through existing electronic fund transfer mechanisms like NEFT and IMPS among others. It also lets you pay for services such as mobile, DTH and utility bills, apart from purchasing tickets and making hotel reservations.

Idea received  five-year prepaid mobile wallet license in December which will enable them to create stored-value cards (physical or digital), which can then be used to purchase products from multiple vendors. However, users will not be able to withdraw money once it is added, for such a service, telecom operators need a banking partner and Idea Cellular currently has a partnership with Axis Bank to offer mobile money transfer services in four circles.

PS: ICICI has not updated M-Pesa page on its website for a long time and it says that the service is available only in Kolkata, West Bengal, Bihar and Rajasthan.

Also read: Different types of mobile wallet services

Encrypted SMS? What RBI Gov Raghuram Rajan Should Really Do About Mobile Payments

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