The State of the mCommerce or Mobile Commerce Industry in India
eCommerce has arisen as a consequence of technological progressions, particularly in computers and internet. eCommerce has led to an increase in productivity and higher customer satisfaction levels due to business processes becoming more simplified, efficient, quick, and accurate. Improved processes have reduced the production and transaction costs, thereby increasing overall profitability. The expanding wireless and mobile networks have extended the scope of eCommerce to another dimension called mCommerce.
Mobile phone usage has picked up to a great extent, due to ease of use and improved connectivity. Indians are good adaptors to mobile services. A study conducted by Informa Telecoms & Media reveals the growing number of mobile subscriptions in India. Whereas number of active mobile subscriptions in the year 2000 was 3.2 million, it grew to 508 million in 2008 and is projected to become 1.159 billion in the year 2013. The mobile subscription penetration rate is expected to be 75% by the year 2011.
Though Indians are extensive users of mobile phones, mCommerce is still in its infancy in India and the initial thrust is expected from banks, followed by point-to-point retail services.
RBI Guidelines for Mobile Commerce
Keeping pace with technological advancements and customer needs, the Reserve Bank of India issued guidelines for mobile banking transactions in October 2008. These guidelines permit banks to provide mobile banking transactions and to mandate that all transactions have to originate from one bank account and terminate into another bank account. RBI has provided approval to 32 banks to provide mobile banking services in India. However, till now, 21 banks have started this service and the transaction volume is lower than the expected volume.
Issues with Mobile Banking
Mobile banking transactions have been low because of the following reasons, which have been pointed out by these banks.
- Implementation of mCommerce is costly because of the end-to-end encryption that is needed. Banks feel that low ticket transactions do not need end-to-end encryption.
- Currently, the transaction limit of Rs 5000 needs to be revised upwards to Rs 10,000. Banks feel that this limit does not support transactions like purchase of airline tickets.
These issues are still being examined by the RBI.
Private banks like ICICI and Standard Chartered, HDFC, Kotak Mahindra also provide mobile banking facilities to their customers. ICICI bank currently has 8 million registered customers for mobile banking, whereas Kotak Mahindra has 52,000 users.
For detailed information on the eCommerce and mCommerce Sectors in India, visit http://www.india-reports.com/summary/ecommerce_in_india.aspx. India Reports provides analysis, reports, PPTs and statistics on India. India Reports also provides clients with custom-made reports to meet specific needs.
