Soon, you won’t have to carry around your plastic money for payment, as your mobile phone number will act as your credit card number. Recently, the Reserve Bank of India (RBI) in its annual policy statement informed that it is in the process of formulating guidelines for a payment system using mobile phones. RBI is talking with public and private sector banks, service providers and industry bodies to develop the payment system. RBI said the draft guidelines would be placed on its official website by June 15, 2008.
In India, mobile usage is growing rapidly. There are about 250 million mobile phone connections in the country, while credit card holders far outnumber mobile phone users. Therefore, mobile for payments has been considered a progressive advance for some time.
As The Times of India reported, RBI said in the policy statement “The rapid expansion of this mode of communication and transaction has created a new distribution channel for banks”. RBI further states, “This channel will certainly facilitate small value payments to merchants, utility providers and others and money transferred at low cost. »
The credit card market will experience more gradual changes this year. A joint venture between Life Insurance Corporation of India (LIC) and GE Money is expected to launch its first product by the end of 2008. As Business Standard reported, the company is now on the cards. But we have resolved these issues (conflict of interest). Currently, we are looking at human resources issues. The two financial giants plan to launch the card by the end of the calendar year.
Once the credit card is launched, it would only be offered to LIC customers and policyholders for the first year. GE Money has a 30% stake in the card business, while LIC Housing Finance Company, LIC Mutual Fund and Corporation Bank each own 5% of this business. LIC will own 40% of the company, which is capitalized at nearly Rs.150 crore. LIC has not yet made a decision on the remaining 15% of the total investment. In another positive development, ABN AMRO and Indian travel portal MakeMyTrip.com recently launched a distinctive co-branded credit card, ‘Go Card’. The card offers special benefits and a wide range of travel-related promotions and packages.
By Addi Vardhaman