Money on your phone sets you free,” philosophizes 20-year-old business student Lalit Ramsisaria. “I don’t need to be in front of a computer to book train tickets or buy a gift for my girlfriend. All I need to do is to launch an application on my phone, make a few clicks and my shopping is done.” Ramsisaria, who has a Nokia E71, is an avid user of a mobile wallet service called ngpay (www.ngpay.com). “All I need is GPRS on my phone and my debit card details,” says Ramsisaria.
Ngpay is one of the many applications launched over the last few years in the fast-growing sector of mobile wallet services. Also called m-banking, these services are an initial step towards a world where you can replace your wallet and credit cards completely with your phone. “Mobile banking is a form of cashless banking that enables you to access and use your bank account, debit or credit card through an application on the mobile phone,” says Gautam Shiknis, chief executive officer, mChek ( www.mchek.com ), another mobile wallet service.
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These services connect you to vendors—merchants, retailers, cinema halls, restaurants, etc—and allow you to make payments using debit or credit card details. All you need is either a GPRS-enabled phone or the ability to send simple SMSes.
If you are not comfortable with third-party applications, you can take a wallet from your mobile phone operator. Recently, the Reserve Bank of India (RBI) cleared the way for a second kind of mobile wallet service—called the “semi-closed mobile wallet”. In this service, you can load money into your cellphone from a licensed company and make payments with it, but you can’t use it to withdraw money, which is what a full-fledged mobile wallet aims to do.
In a pilot, Airtel has launched semi-closed mobile wallet services in Delhi, Gurgaon, Faridabad and Chennai. Called Airtel Money (www.airtelmoney.in), it is a free service that allows you to load up cash in your phone, making your SIM a prepaid account as it were, and use it with partnering vendors to pay bills. Airtel Money has, for instance, tied up with around 40 vendors in Haryana and Delhi, including coffee shops, restaurants and cinema halls. Some semi-closed mobile wallet services, such as Mobile Money Services from Nokia and Yes Bank, even allow you to withdraw cash from specified ATMs.
Are you at risk?
Furnishing your bank account details to an unknown application when there’s so much fraud going on is never easy. But mobile wallets are as safe as any other online transaction. “The technology which drives the mobile wallet is quite secure and mostly works on two-way authentication,” says Ashish Sinha, founder of www.pluggd.in, a website on start-ups. It means that every time you make a transaction, the program will automatically ask you for your PIN, which only you know. “Transacting like this is as safe as an ATM transaction. You need to enter a six-digit PIN to complete the transaction,” says Sourabh Jain, CEO of ngpay.
Though most of these services are at a nascent stage, especially when you look at their list of vendors, it’s a fast-growing market. After Airtel, Vodafone is in the process of tying up with ICICI Bank to launch a semi-closed mobile service called m-paisa, which it has floated successfully in countries such as Kenya and Japan. Services such as ngpay have over one million users across the country, while mChek boasts of over two million customers, with a network of more than 100 partners that offer a variety of products and services. This is tiny when compared with the number of mobile users in the country, which currently stands at around 650 million.
“The system is very simple for the masses to adopt. I think Indians will adopt m-banking much more efficiently once they figure that with an SMS they can transfer money to their loved ones. It’s like a move from no phone to mobile phones which Indians did, skipping the landline completely,” says Shiknis.
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