Soon you will not have to carry your plastic money for your payment purposes as your mobile number will act as a credit card number. Recently, the Reserve Bank of India (RBI) informed in its annual policy statement that it was in the process of formulating guidelines for payment systems using mobile phones. RBI is in discussion with both public and private sector banks, service providers and industry bodies to develop the payment system. RBI stated that the draft guidelines would be placed on its official website by June 15, 2008.
Mobile usage is increasing rapidly in India. There are about 250 million mobile phone connections in the country, while credit card holders are very less compared to the number of mobile phone users. Therefore, mobile for payments is being considered as a progressive step since quite some time.
As reported by The Times of India, the RBI said in the policy statement, “The rapid expansion of this mode of communication and transactions has created a new distribution channel for banks.” The RBI further states, “This channel will definitely facilitate small value payments to merchants, utility service providers and the like to transfer money at low and low cost.”
The credit card market is seeing some more progressive changes this year. A joint venture between Life Insurance Corporation of India (LIC) and GE Money is likely to launch its first product by the end of 2008. As reported by Business Standard, venture is now on the cards. But we have resolved those issues (conflict of interest). Presently, we are looking into the issues related to HR. The two financial giants are planning to launch the card by the end of the calendar year.
Once the credit card is launched it will be offered only to LIC customers and policy holders in the first year. GE Money has 30 per cent stake in the card venture, while LIC Housing Finance Company, LIC Mutual Fund and Corporation Bank have 5 per cent each. LIC will hold 40 per cent stake in the company, which has a capitalization of around Rs 150 crore. LIC is yet to take a decision on the remaining 15 per cent stake in the total investment. In another positive development, ABN AMRO recently launched ‘Go Card’, an exclusive co-branded credit card with India’s travel portal MakeMyTrip.com. The card offers exclusive reward benefits and a good range of travel-related promotions and packages.