Ronnie05's Blog

Semi Closed mWallets to be mainstream soon (Move over Debit cards!)

Posted in mWallets and mPayments by Manas Ganguly on May 7, 2011

Reserve Bank of India has increased the amount that users can store in their m-wallet (mobile wallet) to Rs 50,000 from current Rs 5000. It has also relaxed the daily transaction limit for this growing segment from Rs.1000 per day to Rs.5000 per day. This brings semi closed m-wallets on par with the other semi-closed prepaid instruments.A semi closed prepaid wallet allows loading of money into a payment instrument, but cannot be used to withdraw money.Semi-closed wallet are prepaid payment instruments that are redeemable at a group of clearly-identified merchant locations/ establishments which contract specifically with the issuer to accept the payment instrument. These instruments do not permit cash withdrawal or redemption by the holder. Essentially, what this implies is that operator subscribers cannot use the ‘currency’ to buy talk time (RBI has mandated that the prepaid currency needs to be kept separate from talk time currency).

The move has come after intense lobbying from banks and other stakeholders like mobile operators, who argued that Rs 5,000 transaction limit is too little to let the m-wallet system grow.Through a notification, RBI has announced the move attributing it to “the potential of such mobile-based prepaid instruments for promoting non-cash based transactions and the interest evinced by non-bank (like Mobile operators) entities in promoting these products”. With this change, the mobile based prepaid payment instruments are being brought on par with other prepaid services, like Itz Cash, Done Card, Beam, Oxigen etc.

RBI, however has set two conditions,on the Mobile wallet transactions:
– These wallets cannot be purchased or reloaded against airtime/talktime. However, they can be used to buy recharges
– These wallets can only be used to allow purchase of goods and services, not person to person transfer of value.

The success of the m-wallet system in the country can be judged by the fact that of the 39 banks, that were granted approval for mobile banking, 34 banks have launched the mobile banking services.On an average, 6.8 lakh transactions amounting to 61 crore in a month are settled through this channel (data point for the month of February 2011 courtesy The Mobile Indian).

As the number of cell phone users is many times more than the number of bank accounts, m-wallets can serve the purpose of enhancing the reach of banking to large sections of the country. M-wallets can also facilitate payment of utility bills including water, electricity, telephone, insurance premiums, cooking gas, etc. But the biggest advantage of mobile banking is that it cuts down on cost of providing banking related services to the customers. For telecom companies as well as banks, mobile banking is the surest way to achieve growth.

Leading mobile operators Bharti Airtel, Vodafone and Idea have tied up with SBI, ICICI Bank and Axis Bank respectively to offer such facilities to their subscribers.

Nokia Money (Part 1): A new eco-system in making!

Posted in The Technology Ecosystem by Manas Ganguly on September 7, 2009

Nokia is launching a mobile financial service next year targeting consumers, mainly in emerging markets, with a phone but no banking account. Consumers would thus be the Sec D junta, who use the mobile as a means to earn livelihoods but do-not have any social and financial security. There are 4 billion mobile phone users globally but only 1.6 billion bank accounts and 1 billion credit cards. There is pretty significant gap between people, especially in emerging markets, who have a mobile device yet don’t have a bank account. Nokia is truly looking at the C K Prahlad’s “bottom of the pyramid” in trying to put together this service. The strength in numbers/volumes outweighs the margin considerations. Nokia already has a tremendous equity as a device manufacturer in the Sec D segment. Services like Nokia Money and Life tools would make this strengthen this equity even further.

Nokia Money enables people to carry out daily money management with their mobile devices. The service has been designed to be simple and convenient as making a voice call or sending an SMS. It will enable consumers to send money to another person just by using the person’s mobile phone number, as well as to pay merchants for goods and services, pay their utility bills, or recharge their prepaid SIM cards (SIM top-up). The services can be accessed 24 hours a day from anywhere, meaning savings in travel costs and time. At the touch of a button a customer can manage their personal finances, check a balance, keep track of expenses and payments, pay for products or services, buy tickets for buses, trains and taxis as well as add credit to their mobile account. One can add cash through a Nokia agent. Nokia Money also enables remote workers to safely send money to their families and it can be used to pay off microloans. It provides instant money transfers in time-critical situations and saves travel time as well as reducing the risk of loss or theft.

NOkia Money

Nokia Money service is based on the mobile payment platform of Obopay, a privately-owned firm that Nokia invested in earlier this year, and it is now building up a network of agents. Obopay, uses text messaging and mobile internet access, charges users a fee to send money or to top up their accounts. Mobile money is one of the hottest topics in the wireless world, but so far take-up of services has been limited mostly to a few emerging markets, as in developed countries, the popularity of online banking has been a brake on mobile money. The Consultative Group to Assist the Poor (CGAP), a U.S.-based microfinance policy and research center, has said the market for mobile financial services to poor people in emerging markets will surge from nothing to $5 billion in 2012. Transactions on the device opens up an opportunity to empower people with access to secure financial service for the first time. With its presence and reach, Nokia is well positioned, especially in emerging markets, to bring electronic means of payment to hundreds of millions of individuals for the first time. Now payments would be made time and location independent, while also providing better financial control, especially for those people who have never had a bank account before.


The mobile service to poor people began in early 2007 with a launch of Safaricom’s M-PESA in Kenya, which has attracted 6.5 million customers, or one in six Kenyans. By the end of 2009, CGAP expects more than 120 mobile money implementations in developing markets.

Mary McDowell (Chief Development Officer, Nokia) said Nokia wanted to move beyond a system in which people were tied to a single operator or bank, noting that the Obopay works with both Nokia and non-Nokia handsets. She told Reuters it was too early to talk about revenue or profitability expectations, saying only that “the business model for us is to participate in the transaction stream as well.”

In the true Nokia spirit, Nokia is not opening up the offering to any other partner in the eco-system and going alone with its efforts to create a new Financial transactions eco-system. Nokia did not announce any partnerships with operators or financial institutions, only saying that Nokia Money would be rolled out gradually to selected markets starting in early 2010.

It would appear that Nokia is extremely positive on the pay offs from this service over a time horizon, which is why it has not de-risked the model by adding partners!


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