Mobile-based payment services could account for US$350 billion in payments and banking transactions in India by 2015, producing fee income that could exceed US$4.5 billion, a new report suggests.
While more than 110 million households in India do not have a bank account, 42% of them have at least one mobile phone, and that will help propel growth in mobile payments and funds-transfer services, Boston Consulting Group notes in the report Digital India: The Rush to Mobile Money released July 13.
“And nearly 90% of those phones are capable of handling basic financial transactions,” the authors of the report said, noting banks, telecommunication operators, device makers and service providers will share the fees generated from mobile payments and banking services.
For banks, it is far less costly to offer banking services using mobile phones than to build new branches in rural areas, outside of major cities, the report notes.
“Mobile-enabled business correspondents can serve a customer for 8 to 15 cents per transaction,” the authors said in the report. “This is far below the US$1 to US$1.50 cost at a branch.”
For customers willing to conduct banking directly using their mobile phones, the cost per transaction drops to less than 1 cent, the report added.
By 2015, potential mobile-based transactions in government payments could total up to US$40 billion, while peer-to-peer remittances could total up to US$70 billion, bill payments and POS purchases could reach US$40 billion, and consumer banking volume could climb to $150 billion, according to the report.
