Much like Africa, India is proving to be fertile ground for mobile money services, and payments processor Calpian plans to extend its reach in the market.
The Dallas-based Calpian will use part of a $5 million infusion from Hall Financial Group to accelerate its activities in India, Calpian CEO Harold Montgomery says.
"The market is so wide open in terms of size and scale," says Montgomery. "There are more than 900 million mobile phones in India. So it's like Metro PCS on a grand scale."
Calpian offers prepaid mobile payments in India through a subsidiary, Money-on-Mobile, which transfers funds and enables consumers to make purchases through SMS text messages. Hall Financial's chairman, Craig Hall, invests mostly in software, real estate, oil and gas. Hall will advise Money-on-Mobile on financial issues for the next three years.
Money-on-Mobile has about 180,000 retail partners in the country. Consumers can use the service to pay utility bills and make purchases for travel, mobile phone service, general retail and entertainment. Users can make payments in person at retailers, and can also make payments digitally by contacting Money-on-Mobile and selecting from a menu of payees for SMS transfer.
"We get a lot of payments for travel ticketing for buses or rails," Montgomery says, adding the company plans to add more robust e-commerce and m-commerce services as smartphone adoption rises in the Indian market.
The service is aimed mostly at the unbanked, and it is available to anyone who wishes to use mobile phones for payments, Montgomery says.
"It's similar to a cash payment, we just make it digital," Montgomery says, adding the service does not require a specific mobile carrier or bank.
It's easier to find a mobile phone user in India than an ATM, Montgomery says. "A lot of people in India don't want a bank account. They make about $300 per month and don't want that money tied up in a bank account."
Bank-issued payment cards are underutilized in India. While there are more than 350 million payment cards in India, the average card is not used frequently.
As such, mobile money services are increasingly popular in India. Following its success in Africa, the telecom-driven M-Pesa mobile money service expanded to India last year through Vodafone. M-Pesa also launched on the Vodafone network in Romania this week, marking the mobile payment system's first move into Europe.
Credit card companies are turning to mobile to increase use. Visa recently partnered with Monitise and ICICI Bank to offer mobile payment services to the bank's customers. Together with HDFC Bank, another Visa/Monitise partner, the venture covers more than half of the country's card market.