Why mobile money has failed to take off in India
Tuesday, June 24, 2014
As we report this week, in much of the developing world, mobile money is evolving.Initially just a means of making payments, it’s now becoming a platform for an entire financial-services industry. But one of the world’s biggest and poorest countries has remained immune to the attractions of mobile money. Despite the potential benefits, “the uptake has been limited,” says Graham Wright of MicroSave, a financial-inclusion organisation working in India. “And because of those challenges, the mobile operators are unsure about how much to invest in this business.”
That doesn’t mean there isn’t opportunity. India has 15 mobile money providers, second only to Nigeria. Of the 904 million mobile subscriptions in India, 371 million (pdf) are in rural areas. Analysts think that mobile money transfers in India could be worth $350 billion annually (paywall) by next year. Yet the state of the industry remains small: Less money moves through wireless transfers in India than in either Pakistan or Bangladesh, both of which have smaller, poorer populations.