Mobile banking in India is growing slowly, although not very significantly, according to m-commerce

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companies — Obopay and ngpay. Differences between banks and telecommunication companies over ownership of customers, operating costs and revenue-sharing, technology, security, awareness, and the absence of a viable business model pose challenges to the industry’s growth.

Of the 32 banks that have received licences to offer mobile banking, only 21 have started service. Sachin Sondhi, senior director of consulting, Deloitte India, said, “As per a study, India has about 40 crore mobile phone subscribers, of which only 2 crore (5 per cent) are registered users of mobile banking. More significantly, only 25 lakh (0.5 per cent) of them are active mobile banking users. The industry faces three main challenges – behavioral (concerns about transaction security), partnership issues between banks and telcos, and technical.’’

According to Deepak Chandnani, president of Asia and Africa, Obopay, trust and brand are the key to win consumer confidence to increase mobile banking transactions. “Transaction banking through mobiles is still at a nascent stage, while information-based banking on the phone has picked up,’’ he added.

Last year, Obopay tied up with Nokia to launch a mobile payment service called ‘Nokia Money’, to leverage on the Nokia brand.

Ngpay, a mobile commerce network company, is seeing significant traction for its Mall on Mobile but says more needs to be done. HDFC Bank and Axis Bank have opened their virtual branches on ngpay’s Mall. About 60 per cent of the firm’s 700,000 registered users are outside the top four metros.

Sourabh Jain, founder and chief executive officer of ngpay, said, “Utility, ease-of-use and security are the key factors to be addressed to make a consumer start using any service and m-banking is not an exception. Now, we see consumers in large numbers going beyond balance enquiries and conducting funds transfers and even buying/redeeming mutual funds. Awareness of mobile commerce and banking needs a significant boost.”