Wednesday, May 25, 2011

Mobile banking India style

"Mobile banking to most Indians is complex and too technical" said A.P. Hota, chief executive of National Payments Corporation of India. (Read here), and it shows. According to this article the potential target market for mobile money subscribers are in the hundreds of millions. This is larger than the population of most countries. Yet, very few people actually use mobile phones to do financial transactions.

The Reserve Bank of India have relaxed many of the restraining, regulatory rules and have licensed 39 banks to offer mobile banking, yet only a few hundred thousand subscribers use mobile banking regularly performing less than a million transactions a month! (According to the referenced article) This is off the scale disappointing.

With such huge potential, it is important to figure out what is the deterrent to not more people using a service for which a clear need exist. While I do not know enough to provide a clear opinion, the following may provide some clues:
  • Do the existing service provided for in the Indian market really solve a defined need, or is it just, well... mobile banking.
  • Mobile banking (in most countries) is not perceived as "complex and too technical", as is the case (it seems) in India. Is this because Indians are not as technically astute as citizens of other countries, or because the implementations in India are too complex?


Nikhil Pahwa said...

you might want to check out our visualization on mobile banking transactions. The data isn't particularly encouraging:

Country Kitchen said...

I was part of the Sagentia team when Vodafone originally tried to roll out M-PESA in India - we were all terriby worried about how we'd cope with the increased levels of support that would be needed and the way in which M-PESA would cope with the expected transaction rate. Neither of those proved to be a problem, due to regulatory issues and lack of Banking partners, preventing roll-out - that was in 2008. Now that regulatory / Banking issues have been addressed, it is interesting to see that not all countries rush to use mobile money in the same way as Kenya. I am just back from S Africa, where it was disappointing to see lack of up-take in mobile money. I suspect marketing campaigns (or lack of) being the major issue, but cultural differences cannot be ignored.