“Momentum in the mobile payment market gathered further in 2008 with a number of high-profile launches of mobile money transfer services in multiple markets, participation of major global institutions in near field communication payment trials, as well as new payment solutions entering the market,” Sandy Shen, a research director at Gartner, said in the statement. “...At the same time, security concerns, an inadequate ‘ecosystem’ and undefined areas in banking regulations remain challenges for mobile payment.”
To protect against misuse, Indian regulations require any wireless transaction to be routed through banks, and technology vendors typically incorporate measures such as password protection for each transaction.
Shen does not expect NFC technology to be deployed in India in the near future due to the missing infrastructure for contactless payments. “Another big hurdle (in many markets including India) is mobile phone operators and banks have to work together; there is a tug of war going on (on who will spend on infrastructure),” she said in a phone interview.
Ajay Adiseshann, founder and managing director of Mumbai-based mobile payments firm PayMate India Pvt. Ltd, also doesn’t believe India is ready for the technology. “In developing countries you need an economical solution, not a capital intensive one. Developing countries will depend on cost effective, SMS and IVR (interactive voice response)...I don’t think NFC will catch on in India or China.”
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