Mobile Commerce in India
According to the report on eCommerce in India available on www.india-reports (http://www.india-reports.com/summary/ecommerce_in_india.aspx), Mobile Commerce is about the purchase and sale of goods and services through the cellphone with the involvement of a financial institution.
Mobile Commerce includes the following:
Travel and Ticketing Movie Ticketing Bill payments to utility and service companies Merchant & Retail Transactions Money Transfer
Mobile Commerce services are evolving rapidly in India due to the coming together of mobile service providers, banks and payment service providers to offer more products and secure transactions through mobile networks.
While eCommerce is limited to PC users only, Mobile Commerce is open to almost everyone with a cellphone and mobile connection. Mobile Commerce is expected to grow because the mobile usage and ownership penetration is more than 4 to 5 times than a PC and growing at a very fast rate.
With mobile commerce offerings expanding, customers in India have the hand-held convenience of using their mobile phones for making payments for taxi fares and recharging prepaid phone cards.
Increased mobile penetration and use of GPRS on handsets has resulted in the digital downloads market to cross Rs.2.55 Billion by end of March 2008. Monetary transfers or transactions through mobile phones are found to be much cheaper than traditional bank transfers as the transaction costs are much lower in the former. Innovative solutions for daily use such as payment of auto or taxi fares Inter-bank transfers services are also on the anvil. ICICI Bank Ltd, India’s largest private bank, has already started offering all its services through mobile phones (called mobile banking) since January 2008. Standard Chartered bank has launched a service that enables money transfer from any ATM to any mobile phone across the country. The recipient receives a pin number on his or her mobile phone and the sender has to convey the order number to the recipient. Using these two the recipient can withdraw money from the bank’s ATM’s. Feasibility studies are being conducted to offer mobile commerce to microfinance firms to enable them collect payments from remote areas.
The biggest challenge to Mobile Commerce is the security of payment through mobiles. Mobile Commerce Services like the mobile wallet which helps make payments at retail outlets through text messages have been hindered by the guidelines issued by the Reserve Bank of India due to security concerns.
Mobile Payment Service Providers like Obopay Inc and mChek India Payment Systems Pvt. Ltd are planning on services that would work within the RBI prescribed guidelines like bank account-linked services and mobile debit cards.
The other challenges faced by Mobile Commerce are – the speed of GPRS and user interfaces.
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