Soon all of us who are used to payment by credit card may have to get used to paying using our mobile phones. Already legal framework is in place to facilitate the same. A customer can transfer up to a maximum of Rs 50,000/- from his bank account to a mobile wallet (till recently this limit was up to Rs 5000/- and has since been enhanced).
How does it work? In case of Corporation Bank, which has recently launched m-wallet scheme, it goes like this. A customer who applies to use this scheme would install a special installation on his/her mobile. When a customer goes to a shop or a restaurant and decides to make a payment, s/he would log on the application and enter the amount to be paid. An automated generated barcode would appear on the screen, which the merchant would scan using his own mobile phone camera. The amount gets debited to the m-wallet.
Even those who do not have installation based m-wallet can use sms-based m-wallet services. Seeing huge opportunities, many big names have already jumped into the fray, including ICICI Prudential, Birla Sun Life, Reliance Energy and e-commerce portals such as eBay India, HomeShop18, BookMyShow and RedBus.
Apart from being just a convenience, RBI also considers that in time m-wallet could turn out to be an answer to financial inclusion challenges that planners have been facing for long time. For example, govt could transfer cash directly to the m-wallets of beneficiaries, thus overcoming the problems of distances in accessing the banker services. Of course before the Government could take it up on a large scale it would need to resolve a number of practical challenges.
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