Soon you will not have to carry your plastic money for payment purposes, as your mobile number will act like a credit card number. The Reserve Bank of India (RBI) recently announced in its annual policy statement that it is in the process of developing guidelines for a mobile phone payment system. RBI is discussing the development of a payment system with state and private banks, service providers and industry bodies. RBI said the draft guidelines will be posted on its official website by June 15, 2008.
In India, the use of mobile phones is growing rapidly. The country has about 250 million connections to mobile phones, while the number of credit card holders is significantly lower compared to the number of mobile phone users. Consequently, a mobile phone for payments has long been regarded as a progressive step forward.
According to The Times of India, RBI said in a policy statement, "The rapid expansion of this communications and transaction method has opened a new delivery channel for banks." RBI also states: “This channel will certainly facilitate low payments to sellers, utility providers, and likes and low-cost money transfers.”
The credit card market will witness even more progressive changes this year. A joint venture between the Indian Life Insurance Corporation (LIC) and GE Money is likely to launch its first product by the end of 2008. According to Business Standard, now the company works on cards. But we figured out these issues (conflict of interest). We are currently considering human resources issues. Two financial giants plan to issue a card by the end of the calendar year.
Once a credit card is launched, it will be offered only to LIC customers and policyholders for 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 a 5% interest. LIC will have 40 percent of the company, whose capitalization is about 150 crore rupees. LIC has not yet decided on the remaining 15 percent of the total investment. Another positive development was that ABN AMRO, together with MakeMyTrip.com, an Indian travel portal, recently issued a unique Go Card joint credit card. The card offers special incentive benefits and a good selection of travel promotions and packages.