mobile + debit card/ credit card + many other services.
Virtual money in your mobile account from which you can pay by just sending an sms
A non financial company storing funds in an e-wallet. This account may be loaded from anywhere by depositing cash. The cell phone then may be used to access money from anywhere and for any transanction.
Started in Japan as a solution to the problem of not having small changes in gas station, ticket counter etc.
NTT DoCoMo started to offer m-wallet service in 2004.
In Kenya Safaricom( an affiliate of Vodafone) have 150,000 m- wallet customer who deposit money in their mobile account and making the payment by sending sms.
Some services offered by m-wallet
Banking- withdraw money, make remittance and inter account transfer.
Electronic wallet- shopping at malls and retail stores.
e-commerce and e-trading- internet shopping and online financial transfer
Electronic ticket- a ticket downloaded in your mobile in digital format.
6. Membership id in gym, club, library etc.
7. Identification and access control for employees and students etc.
Difference between m-wallet and internet banking…
Internet banking or mobile banking
The customer can access his bank account through web enabled handset and he can make the transaction through the internet.
No virtual money stored in his mobile account.
A non banking company storing virtual money in the mobile account of customer from which he can make transaction through sms or through internet.
No bank account involved.
An earlier version of m-wallet in which the Bank of Panjab offered a service in the year 2002 by which its customers can purchase by sending an sms. The bank, in turn, would send a message confirming the purchase both to the merchant and to the customer.
Why no m-wallet in India?
RBI guidelines do not allow third party transfer of money not through a bank account.
It is expected that RBI will come with rules for m-wallet services.
Downloading ringtones by a prepaid account is a limited version of m-wallet. It do not fall under RBI guidelines since no 3 rd party involved.
We are in the way of m-wallet……
Delhi Metro Rail Corporation with Citi Bank- m-ticket
Reliance communications with HDFC Bank- M pay.
M pay is a virtual credit card that can be used to pay post paid charges of Reliance Communication mobile, to pay for petrol from filling station of Reliance Energy and to pay for movie ticket, travelling ticket, restaurants of some selected merchants.
Airtel with SBI, ICICI Bank, Corporation BANK- M Check.
The Cost involved
In US as low as 10cents per transaction due to high volume of transactions
In India it can be 0.8% to 1.5% of the total value of transaction due to low volume of business.
Customers may not accept cell phone as a mode of payment
High risk of fraud because of the use of information technology and no bank accounts involved
Need good dispute settlement mechanism.
Low average revenue of Indian cell phone user.
Vendors and shoppers may not accept the system. Eg: newspaper vendor and milkman.