Mobile money for social inclusion

Mobile money for social inclusion

Italian Prime Minister Mario Monti

New Delhi: 


  1. End-year projections for the index, which closed on Thursday at 16,990.76, ranged from 15,300 to 21,000 points.
If you are a visitor of this website, I assume you may have used your mobile phone in place of cash at least once, or, to say the least, you may have at least considered this option.

It’s fantastic to have money on your mobile phone and use it instead cash or card. And, if experts are to be believed, it is safer than using a card. Just send a text message and it’s done.

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Since it appeared an interesting topic to chat about, I invited a few experts over for Money Mantra, where I learnt that that is more than just money. I am not talking about accessing the Internet on your mobile phone and then making a purchase. This is more than that.

These days it’s more than a phone call that you use a mobile handset for. The phone is now going to be a tool for social inclusion, a yarn to knit all those together who are not connected economically and are often referred to as the “unorganized sector”.

People who don’t give you a receipt in return for your payment for a service. A peon, a maid, people who don’t have a bank account or don’t operate it most days in a year. It is these people who will gain the most.

There are 240 million bank accounts in India, not a small number by any means, but only a fraction when compared with the overall population.

In a country where nearly half of publicly distributed food goes into the wrong hands and much of fuel subsidy goes to telecom companies, rich farmers and luxury car owners, mobile wallets can solve this problem to a great extent.

Mobile money can reach someone with just a text and one can use it with just a text message. No internet, no credit card.

Shashank M. Joshi’s Money on Mobile is already catering to thousands of educated well off and not-so-well-off customers. ICICI Bank and Nokia, among many other companies, have also jumped into the business. Joshi tells me his firm facilitates Rs 2 crore of transactions every day.

Anil Satpathy of Afaqs Magazine told us about what happened in Kenya, and Parijat Chakraborty of TNS India was quick to caution about it. A Kenyan mobile services firm popularized M-Pesa among poor workers. This meant they could deposit, withdraw and earn interest money on their mobile. M-Pesa became an instrument of financial connectivity between the haves and have-nots.

Banks are a big divider among these two categories. However, there was a hurdle in it. Chakraborty told us how the Kenyan government lost control over that money. There were fears that the medium may have become a safe route for black money, and so central banks the world over built every possible wall around themselves to make sure instruments like M-Pesa didn’t enter their systems.

Joshi of Money on Mobile tells us why his business is keeping it safe to avoid the Kenya mistake. Every service user should be fulfilling Know Your Customer norms. These norms are mandatory for banks before they open an account for a customer. However, one big hurdle remains before mobile wallets and that is the user-end interface. If I pay you through mobile, you should be ready to take that money with an account, a problem that can be solved with some policy and some innovation. Next time when your house maid’s phone rings, think about money and think about this connection.

The author is the anchor of the show Money Mantra, which is aired at 6 pm from Monday to Friday on NDTV Profit. To see all the episodes of Money Mantra, click here.

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