Mobile Money Transfer in India

Mobile phone network is now spread from metro cities to small rural places. In India, mobile phone companies have nearly 1.4 million outlets. Mobile operators have access far more than bank or any money transfer service.

So why not use mobile as a mode of remittance? Clearly, the mobile money transfer service can reach at any remote place. Moreover it decreases the cost of money transfer.

What are the Steps taken by RBI to Start Mobile Money Transfer?

In desire to spread banking network vastly and to initiate mobile money transfer, Reserve Bank of India is taking many helpful steps –

• It is appointing business correspondents in small areas where opening a branch is a costly affair.
• It has picked local shops like kirana, medical and fair price shops as business correspondents to make available mobile money transfer everywhere.
• It is prompting banks to open no-frills accounts.

How Mobile Money Transfer Work?

The working of mobile money transfer is simple–

• The local shops like kirana/medical/fair price shop are business correspondents for a bank.
• The customer goes to nearby business correspondent and deposits money with him.
• The correspondent sends short message to the bank.
• The bank corresponds with customer by sending message directly.
• The receiver collects the money transferred from nearby bank branch or business correspondent.

What are the Benefits of Mobile Money Transfer?

• It gives you convenience of transferring money at any time and from any where.
• It reduces the cost of money transfer.
• It is a timely, safe and paperless transaction.
• It lowers the chances of theft or fraud.
• The customer gets rid from repeated bank visits.
• The customer can keep records easily.

What are the Drawbacks of Mobile Money Transfer?

• The number of fake subscribers is large in the mobile usage. So employing customer norms is difficult.
• The inter-operability across different mobile company cannot be permitted until unique identity number system is placed.
• The mobile money transfer can be misused if there are no rules for size and value of transactions.
• The commission given by bank is very small. So the customers need to transfer minimum Rupees 3000 to 4000 monthly which is quite large amount for poor part of society.

The mobile money transfer system is more beneficial for low income group from interiors of India where economy is mostly cash based. For people from developed section, the demand of mobile money transfer is out of better convenience.