Mobile Money: All you need to know

Mobile Money has been striving to secure a firm and known ground, since a while now, but for many its familiarity is limited to ‘using mobile phone to pay up.’ But the question arises as to how and what exactly is being going around with mobile money, how it works and more importantly how would it benefit users? Talking precisely about India, mobile wallets are at a nascent stage, but knowing for a fact that mobile phone owners could possibly exceed in number than banking customers (also including the non-banking sector, which could afford a mobile phone), the popularity and subsequent usage could shoot up in a few years, if we may say so. We spoke to a few companies who have been contributing towards the shaping up of the mobile money market in India and will brief you about using mobile money. 

What is Mobile Money?
The essential elements of mobile money are banking/non-banking firms, telecom providers, manufacturers (device supporting mobile money, if NFC is implemented) and developers (mobile money apps). Mobile phones are being used for banking purposes, like checking one's account balance, getting updates about our transactions and more. But here, we are talking about using one's mobile as an alternative to making transactions by the traditional methods, and even replacing credit cards, debit cards and so on. In India, mobile money has been introduced by Airtel, Obopay, Vodafone, Loop Mobile. One of the major entrants into mobile money had been Nokia Money. However, only recently, stopped the service as the company ‘supposedly’ wanted to concentrate on its core businesses in India. So, putting it down simply, instead of carrying cash or cards, you make your payments using your mobile phone.

How it works?
There are different methods of mobile payments, but clearly SMS seems to be the preferred one among mobile money players, considering it would make it simpler and easier to use. We’ve explained how Airtel Money, Loop’s M-Wallet and Obopay’s services work.

Mobile money players...

Loop Mobile offers its M-wallet service, powered by Zipcash, to pay utility bills like postpaid, prepaid bills and electricity bills, online shopping, and gift vouchers. To use the service, one needs to load their M-wallet. There is no constraint on the amount, as one can load the wallet with any amount. Zipcash has been using SMS to make and alert users about transactions. For example - You can pay any registered ZipCash merchant by SMSing:  ZIP SEND (USERNAME/NUMBER) (AMOUNT) (PIN) to 56767. Click here for complete details. For online shopping, as you reach the payment option, you will find the Zipcash payment option.  Every user will get a confidential pin that is required to process payments. This security pin will ensure no one uses your mobile wallet, even in case of theft or loss of the device. Zipcash allows transfer of money to other phones and bank accounts, however, you cannot withdraw cash from your M-wallet. 

Airtel Money has caught attention, owing to its peppy mobile payment advertisements. Here, you register and create an account on your mobile. Then, you can load cash in that account by visiting an Airtel Gallery or one can also load money in their Airtel account via Netbanking. So,basically, there are two types of account that users can create with Airtel Money – Express Account and Power Account. The Express Account (maximum expenditure of Rs.10,000 per day) and is limited for recharges and bill payments, while the Power Account (maximum Rs.50,000 tranactions per day) gives a slew of options, like Utilities, travel, movies and money transfers. Airtel users need to type *400# and instantly access the Airtel Money Menu, click here to see USSD and SIM based demos. You currently cannot withdraw money from your Airtel account.

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Another mobile money service is Obopay, and it partners with Union Bank of India, and YES bank. The website also shows the Nokia Money option. The Obopay service offers Easy Send and Easy Pay options, allowing users to initiate payments via SMS, IVR, WAP, Java and FIRE. The user would require the mobile money application on their handset. Click here to know the list of handsets that support the mobile money application. Obopay tried to establish a mobile banking and payment service, which can be simply used via text messages.

Mobile Money Customer Awareness
As aforesaid, mobile money is at its nascent stage and so is the awareness of mobile money. It is being accepted in urban cities, but may still be a matter of concern for mini metros and rural areas. Several people are hesitant about payments made via other modes not involving cards or cash; it's time we gotten over our reservations of making online transactions, but the concern still bothers many. We asked the major mobile money companies what kind of response they have received so far. Users are concerned about security and the mobile money transfers come with security pins and also demand KYC documents.