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Get ready for mobile money transfer - Courtesy Airtel
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Its seems like the entire financial world is going mobile! First it was checking bank accounts then payment through mobile and now if Airtel has its way soon you would be able to transfer money through your that magic device in your hands..
Sharlin Thayil, Chief Operating Officer, Airtel Gujarat circle has said the following “We are in talks with several banks for tie-ups for money transfers through the Western Union Money Transfer,”
For this money transfer service to work one would have to download an application on the mobile phone which would then connect through gprs to make the money transfer possible.
Though gprs usage is relatively low in India such a utility based service could surely have a high number of mobile subscribers based on ease of use of the application.
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India has a population of approximately 1.136 billion people of which 72.2% live in rural areas. A majority of these people including low income people who live in urban areas do not have access to the banking system as opening an account is a major hurdle.
Eko India Financial Services Private Limited (www.eko.co.in) - startup company based in Delhi, India is looking to extend banking facilities in these untapped/un-banked areas through the use of mobile phone as a channel (currently there are over 200 million mobile phone subscribers (GSM & CDMA). Eko is looking to ensure greater financial inclusion and increase the outreach of the banking sector as envisaged by RBI – the Indian Federal Bank through the use of Business Correspondent Model.
Eko’s unified approach to financial services will address two key challenges - ubiquity and comprehensiveness of range of financial services. Often financial services with the focus for financial inclusion have resulted in high transaction & servicing costs, inadequate collection & use of customer information, and a focus on credit based services leading to the exclusion of more needed services including Savings.
The need is for a secure & convenient system that offers choice & customer delight. The most fundamental need is a savings account. Eko plans to integrate and create an ecosystem which greatly leverages existing infrastructure to enable a very low cost “No Frills Savings Account”. Eko plans to execute widespread distribution, in partnerships with banks, of these very low cost “No Frills Savings Account” under the “Business Facilitator and Business Correspondent” regulation from RBI.
We are integrating an infrastructure for widespread distribution of “No Frills Savings Account” (NFSA). Eko Cash Points are retails points who have existing “Prepaid Recharge” business. 24×7 pharmacies will be ECPs providing 24 hr services. Eko Relationship Officers are individual who have full KYC (Know Your Customer) compliance and minimum 1 year of “good” banking record. Such individual would be “introducers” to customers who have limited KYC. This is a mandatory requirement defined by RBI regulations for customers with limited KYC to open “No Frills Savings Account”.
The only infrastructure which will be created grounds-up is going to be the Eko Operations Center (EOC). EOC setup may be distributed in early days of operations in a city/region and would be consolidated once the distribution setup is integrated and in full swing of operation. ECPs and EROs are not working full time for Eko. It is an added source of revenue for them. This model has been inspired by various “agent models” deployed across the globe.
The complete ecosystem is energized by the technology platform. The technology platform adopted is MIFOS, which has been developed by the Grameen Foundation and has been deployed by more than 18 MFIs across the globe.
Once the customer requests for creating the account, the ERO in the same locality is notified. The ERO visits the customer at her/his residence and gets a form filled. Subsequently, ERO brings the customer to the ERO Facilitation Center where the customer is photographed as part of the KYC information and a starter kit with a signature booklet and operating manual (comic) is handed over. Once these procedures are completed, the customer’s account gets activated and now the customer can deposit and further withdraw money at ECPs.
The ECPs are expected to keep a security deposit against which they can mobilize deposits. The security amount is flexible and it is the limit to which the respective ECP can mobilize deposit.
Eventually, multiple value added services would be offered to the members, including more credit and savings product apart from transactional services.
Initially starting with No-Frills Savings Accounts, Eko later intends to have three lines of business; platform, membership and payment. Eko has signed Letters of Intent with three banks including a large MNC bank and two Indian private banks to do a pilot at Uttam Nagar, a low income area in west Delhi. The pilot project is scheduled to go live in the 1st week of December.
Eko aims to become a $1 billion market cap company by 2011. This will require Eko to be a $100million plus revenue company with clear visibility to $1 billion in revenue by 2015 with good profitability.