The average Indian is so steeped in conventional business and finance practices that it is quite an effort to lure him into the world of electronic or mobile payments, leave alone the use of ATM and credit cards; No this is not the educated urban Indian that I am referring to here, but then a few of us still shy away from virtual purchases and payments. Mobile wallets in India are is still in the very nascent stages of adoption though they offer an easy alternative to carrying cash or cards. The current wallets applications store debit or credit card and bank account information in an encrypted form on the device that is used to make all kinds of payments such utility bills, insurance premiums, ticket reservations, e-shopping and the likes.
The Airtel Money feature is quite simple to as the account can be simply topped-up by recharging at the Airtel stores and be used for making payments. Money can in fact be transferred from one Airtel Money Wallet to another or bank accounts depending on Airtel Money account type (Express or Power) registered for, making it quite easy to handle payments and purchases, of course there are charges associated with such transfers. With RBI removing the cap (earlier limited to Rs. 50,000) on mobile transactions, free flow of money is now possible, which once again is based on the account type in case of Airtel Money.
While the mobile wallet process may sound simple and the account, card details if at all stored on the device and most communications being encrypted, security is still a major concern in mobile payments. Factors such as virus attacks, malware, malicious mobile applications that are known to be sending personal data out of the devices and interrupted phone networks leading to failed transactions that still manage to debit accounts go to prove that the environment is still vulnerable to security threats and transaction integrity.
Despite present drawbacks, the mobile wallet market is getting ready for some stiff battles as Google and Apple plan their entry into this domain. Google has launched its Google Wallet app, initially addressing purchases from the Android market. App developers will now have to forcibly switch to Google Wallet to accept payments on app purchase instead of Paypal or other payment options. The catch here is that transaction charges on Google Wallet are much higher, and are bound bring-down profit margins of app developers looking to market their Android apps. Google Wallet users will be able to set individual credit limits and a unique PIN to prevent misuse even if the device is compromised.
Future of mobile wallets now tend to evolve around the latest "Near Field Communication" NFC technology build on the NFC chip that allows automatic communication between mobile devices when in contact with each other (single touch), without any specific permissions. Simply tap the mobile phone on the NFC data reader at the point of sale, key in the bill amount and a PIN if required and complete the purchase. NFC chips also guarantee better security because sensitive data on them is not accessible to the mobile environment. Google Wallet already supports NFC use, while Apple, RIM, Sony Ericsson and Nokia are all planning to incorporate the NFC chips on select versions of their devices by the end of this year.
As mobile wallets become increasing popular and make payments and purchases easier, I can't help but think about the spend in the offing. Will Airtel Money trigger impulse spending? Especially when you can have all the money you want at the right place and the right time? I'd rather be guarded on the amount of money I have on hand!
About the author : Lakshmi.A is a Contributing Editor for TradeBriefs. She can be reached at