Soon you will not have to carry your plastic money for your payments, since your mobile number will act as the credit card number. Recently, the Reserve Bank of India (RBI) in its annual policy statement reported that it was in the process of formulating guidelines for a mobile phone payment system. RBI is discussing with public and private sector banks, service providers and industry bodies to develop the payment system. RBI said that the draft guidelines would be posted on its official website on June 15, 2008.
In India, the use of mobile devices is growing rapidly. There are around 250 million mobile phone connections in the country while credit card holders are much lower compared to the number of mobile phone users. Therefore, mobile payment devices have been considered for quite some time as a progressive step forward.
As The Times of India reported, RBI said in the policy statement: “The rapid expansion of this mode of communication and transaction has spawned a new delivery channel for banks.” RBI further states: “This channel will definitely facilitate small value payments to merchants, utility providers and the like and money transferred at a low cost.”
The credit card market will see some more progressive changes this year. A joint venture between Life Insurance Corporation of India (LIC) and GE Money is likely to launch its first product in late 2008. As Business Standard has reported, the venture is already in play. But we have solved those problems (conflict of interest). We are currently looking at issues related to human resources. The two financial giants plan to launch the card by the end of the calendar year.
Once the credit card is launched, it will be offered only to LIC customers and policyholders in the first year. GE Money has a 30 percent stake in the card company, while LIC Housing Finance Company, LIC Mutual Fund, and Corporation Bank each have 5 percent in this company. LIC will hold 40 per cent of the company, which is capitalized at about Rs 150 crore. LIC has yet to make a decision on the remaining 15 percent share of the total investment. In another positive development, ABN AMRO with India’s travel portal MakeMyTrip.com recently launched a co-branded signature credit card, ‘Go Card’. The card offers special rewards benefits and a good variety of travel-related promotions and packages.