In early October the New York Times featured a story about how mobile payment startups in India were running up against a consumer public wild about mobile phones but shy about using such devices to make financial transactions.
Less than two months later, however, word comes of a massive jump in mobile payments in the world’s second-largest country.
On Monday, the Hindu Business Line – the sister publication of the famous Hindu daily newspaper – reported that new data from Deloitte showed a 15-fold increase in the value of mobile transactions taking place in the period stretching from September 2012 to this July. According to the consultancy, there were 701,000 transactions worth Rs 408 crore (or roughly USD 66 million; a “crore” is a unit in the South Asian numbering system equal to 10 million) in July, compared to just 94,000 transactions in the previous September, valued at Rs 26 crore (USD 4.2 million).
Meanwhile, Deloitte’s report reveals that 17 million Indians now access banking services through their mobile devices.
One factor driving the growth is a nationwide system called the “immediate payment service,” which offers instant secure electronic funds transfers, seven days a week and 24 hours a day.
More recently, a the new governor of the Reserve Bank of India, Raghuram Rajan, has emerged as a vocal proponent of mobile payments, saying they could be a “game changer” for the historically underbanked country, and announcing initiatives to clear away regulations that had stunted developments in the sector.
While the number and total value of mobile payment transactions remains modest, the ultimate size of the market is nothing short of staggering. One indication of this is that estimates on the number of mobile phone users in the nation of 1.2 billion sometimes vary in numbers larger than the populations of major countries.