Mobile money adoption in rural India could lag

In India, awareness levels, implementation and use of mobile money is at its early stages. While accepted in urban cities and metros, rural India is still an untapped market due to technological constraints.
Written by Nitin Puri, Contributor

The essential elements for mobile money to be successful include support from both banking and non-banking firms, developers for creating the mobile money apps, manufacturers for mobile phones supporting mobile money with Near Field Communications (NFC) antennas and chips, and finally the mobile operators itself.

For years within India, mobile phones have being used for banking purposes, such as account balances and real-time transaction details.

Now, we are talking about using a mobile phone as an alternative to making traditional transactions, such as swiping cards at the cash register or till, with the goal of eventually replacing both credit and debit cards by swiping your mobile phone.

In India, mobile money has been introduced by a variety of companies, such as Airtel, Loop Mobile, Obopay and Vodafone. While there are different methods of mobile payments, SMS seems to be the preferred choice, as it is the both the easiest and simplest to use.

Within India, Airtel Money is the most popular, primarily because of its mobile payment advertisements, network coverage, and customer care center network across India. With Airtel Money, you register and create an account on your mobile, and the mobile balance is then topped up into the account by visiting an Airtel customer care center or online via net banking.

Currently, there are two types of accounts that users can create with Airtel Money: either an Express Account or a Power Account. The Express Account allows mobile recharges and bill payments, with a maximum daily spending limit of INR 10,000 (US$184). The Power Account adds to the Express account Utilities, travel, movies and money transfers, movies, travel, and utilities, with a maximum daily spending limit of INR 50,000 (US$921).

Airtel Money
Airtel Money is the leader in the Indian market.

Rural pick up to be slow

The usage of mobile phones within rural India is increasing, as people are both understanding and realizing the benefits of using mobile phones for mobile money transactions.

Both mobile operators and manufacturers are increasing awareness to people living in rural India, and this has resulted in strong growth for both, as the number of mobile phone users and subscribers has increased.

However, it will still take years to fully penetrate this sector specifically within rural India, in contrast to the urban metros across India.

The main reason for this is because both consumers and retailers in the urban metros are already aware and using mobile phones for mobile money purposes.

Furthermore, Indian retailers, in both urban and rural India, have yet to fully embrace the implementation of NFC devices and sensors in their establishments, in order to fully harness and utilize the potential of mobile money transactions. 

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