Mobile commerce has big growth potential in India: study

Mobile commerce, which is part of the mobile value-added services or mobile VAS, is set for big growth over the next few years with growing sophistication and lower prices of mobile handsets, a report by the Internet and Mobile Association of India said.

While M-commerce is in its nascent stages, it is slated to boom over the next few years owing to its intrinsic link to the booming mobile telephony sector in the region, the report said.

The report titled `Mobile Value Added Services in India' projects that the mobile VAS sector (of which M-commerce is a part) will grow from Rs5,780 crore (June 2008) to Rs16,520 crore in June 2010 with the growth in mobile telephony in the country.

The M-commerce platform currently perform a wide variety of transactions - from paying for utility bill and movie tickets to shopping and holidays - via mobile. While the uptake of mobile payments is still gathering pace, services that are more accessible and easier to use are finding favor, it noted.

 All mobile handsets are eligible to use its SMS and IVR (interactive voice recording) based services, making M-commerce an accessible alternative to cash or credit cards, it said, adding, one of the leading players in the sector, PayMate, does not require GPRS or software downloads to use its service.

With the RBI's support for M-banking and the release of its guidelines on mobile banking transactions (Sept-Oct 2008), banks have started roll-out of M-payment products with banks such as Standard Chartered, SBI and IDBI Bank launching their services in the early part of the year.

''We have seen a quarterly increase in M-commerce use and uptake consecutively for the past year. Our users cross over a broad section of society and our variety of transactions reflect this. The most popular uses for our product are utility bill payments, mobile recharge and flight and movie tickets,'' said  Ajay Adiseshann, founder and managing director of PayMate.

PayMate's recently commissioned research by The Nielsen Company shows 64 per cent of those who make M-payment had registered for an M-commerce service within the prior 6 months. This points to rising consumer confidence in M-commerce since the RBI issued its guidelines in Sept-Oct 2008. However, the research highlights lack of awareness and information about the security of M-commerce as the main barrier to up-take of this technology.

Research also demonstrates that PayMate is leading the competition on brand perception elements such as 'trust' and customer service' and that the internet emerges as the most appropriate platform for generating awareness about M-commerce among active and dormant users.

PayMate is a Mumbai-based wireless transactions company offering simple and secure payment solutions across the globe. PayMate's mobile payment solution allows users to link mobile phone to an existing bank account, credit card or a prepaid account, turning it into a secure payment tool to be used anytime, anywhere.

Its hybrid SMS and interactive voice-based simple transaction platform that can be offered even the most basic handsets and across all telecom operators.

PayMate has over 15,000 merchants (online, retail, utilities etc) and 22 leading MNC and PSU banks offering its M-commerce solutions to millions of potential customers in India, the US, Sri Lanka, Nepal and the UAE. These include State Bank of India, Standard Chartered Bank, IDBI Bank, Nations Trust Bank, Everest Bank, Mashreq Bank, Nabil Bank, ABN AMRO Bank, Bank of Ceylon, Corporation Bank and US based leading service provider Infonox (a TSYS company) among others.