The telecom operator’s new ‘Mobile Money’, which enables this, is similar to Vodafone’s M-Pesa service which first pioneered to great success in Africa.
“This platform basically lets users store cash on their phones, and use it for transferring or shopping. Initially, this will be rolled out in Tamil Nadu, specifically for the Chennai – Tirunelveli corridor - to help migrant labourers send back money to their villages,” said Geoff King, Head, Mobile Banking, Aircel.
By partnering with ICICI Bank and Visa, Aircel has been busily signing up ‘banking correspondents’ (who are often simply small shop owners) over the last 18 months.
All a person has to do to transfer money from Chennai to Tirunelveli is to deposit the money with a correspondent in the former area, after which an SMS is sent to the recipient confirming the transaction details. The recipient has to merely go to a banking correspondent in their respective area to retrieve the cash.
“While we sign up the retailers who wish to serve as banking or business correspondents, they go through a certification process by ICICI Bank – which puts the onus of complying with RBI regulations on them. This will work even if both parties have no ICICI bank account, with the minimum amount needed to start an account being Rs. 100,” Mr. King said.
Aircel, which plans to take the service pan-India soon, makes money off each transaction in the form of a commission fee which could range from 1.5 – 3 per cent.
“While we can’t disclose numbers, we are looking at tapping a huge market. While revenue from commission has good potential, this also is a value-added service for us, and will help in customer retention,” he said.
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