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Online Payments
PayPal- A disruptive innovation
· Anyone can register with paypal
· Fill in bank details once
· Use PayPal account to pay for online transactions
· Transactions being settled usually in T+3 days, however depending upon transaction amounts the payments to merchants may be settled daily, every Friday or fortnightly
ITZ cash
· Buy coupons and transact
· Very useful since many people don't have a credit card or uncomfortable sharing credit card details
· Successful tie up with IRCTC
Virtual Money
MoneyOnMobile, an Indian startup, is latching on to an idea that began six years ago in Kenya of transferring money with a few taps of the keypad on an everyday cellphone. That country's mobile payment service, M-Pesa, has become so popular that most Kenyans these days send money, buy groceries and pay restaurant and medical bills and school tuition via cellphone - wirelessly transferring the equivalent of $21 billion annually. M-Pesa has inspired almost 200 similar efforts in other countries.
South Asia is a fertile market for the concept. The region consisting primarily of Bangladesh, India and Pakistan accounts for the largest number of offices actively providing mobile money services, 3.8 million compared with 805,000 in all of Africa and 1.8 million in East Asia and the Pacific. After only four years in operation, Pakistan's wireless network, Easypaisa, is moving some $3.5 billion annually. In Bangladesh, where the bKash wireless payment system has been operating for only two years, the transaction rate is $4 billion annually.
India has been proceeding more slowly, but the pace is quickening. According to the latest tallies from the nation's central bank, the Reserve Bank of India, the number of wireless money transfers has more than doubled since September 2012, moving the annualized equivalent of $3.2 billion. Lately, the two best-financed efforts, Airtel Money and Vodafone M-Pesa, have begun expanding across the country. And because of the nation's huge population, broad adoption of cellphones and some of the lowest airtime rates in the world, even a modest conversion to mobile money in India could make South Asia the world's largest wireless-transfer economy.
By 2015, mobile money transfers in India could total $350 billion annually, some analysts estimate. The size of the opportunity has attracted the major banks and mobile network operators but also at least a dozen new companies, including Beam Money, CanvasM, Ezetap, PayMate, Y-Cash and Zaakpay.
The most rapidly growing new venture is MoneyOnMobile. In operation less than three years, MoneyOnMobile already has attracted four times as many users as Kenya's M-Pesa (75 million versus 18 million) and twice as many retail outlets (163,000 versus 79,000) although its transaction volume is tiny by comparison.
Mobile payments could improve the lives of India's 354 million poor - most of whom have cellphones but no bank accounts, credit cards or debit cards - by lowering the cost of the domestic remittances on which so many families depend. Across India, a hundred million migrants have come to the cities from the countryside in search of work. Every year, these domestic migrants send an estimated $12 billion back to their villages.
Most funds travel in cash via networks of relatives and friends or courier services. Such conduits can be slow, unreliable and expensive; courier commissions approach 5 percent of the amount being sent. Over wireless networks, money can move instantly, at any hour, and sending costs less than a penny. As a result, studies of Kenya have shown, the poor not only have a bit more to spend but also enjoy better health because wage earners can respond more quickly to financial emergencies, such as illness.
MoneyOnMobile is preparing to offer money transfers. It recently received permission from the federal authorities and is negotiating the required alliance with a bank.
Another young company, Eko India Financial Services of Gurgaon, has already made a name for itself in money transfers. But a number of mobile money services in India have proved unrewarding for others, including Beam Money of New Delhi; Boku of Palo Alto, Calif.; mCheck of Bangalore; and even Finland's Nokia.
One possible reason is their reliance on the latest mobile technology, the smartphone. Although there are almost 900 million cellphones in India, a mere 4 percent are smartphones, and only half of those connect to the Internet. As a consequence, MoneyOnMobile is proceeding cautiously, trying to achieve scale with the technology of yesterday that most of its potential customers already own - the ordinary cellphone.
As in developing economies worldwide, almost all Indian subscribers pay in advance for cellphone service, adding a few rupees of airtime to the handset as needed at a retail store, a process known as topping up. Globally, top-ups account for three-fifths of mobile money transactions, and MoneyOnMobile initially focused on that service as well as utility bill payment.
MoneyOnMobile's strategy has therefore been: "Top-ups first. Then bill payment. Next, money transfer."
Although the company's average transaction amounts to less than $1.50, it processes more than 400,000 transactions daily. The result is annual revenue of $200 million, and the company expects to break even early next year.
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