Mobile Banking in India: Luxury for the Rich, Necessity for the Poor

Dennis Faas's picture

Grameen Solutions, an affiliate of the Grameen Bank in Bangladesh has teamed with Obopay, a mobile payment company based in California, to provide banking to a billion people using cellphones. The service targets customers who wish to send money to friends and family, charging 10 cents for every transaction.

Obopay is already very active in the United States. Once an account has been opened, the user can transfer money between bank accounts, credit cards and even other mobile phones via text messages.

When we really think about it, we are lucky to be living in a part of the world that offers so many choices to consumers. We not only have an unlimited amount of fast food restaurants and car dealerships, but we also have the option to choose which food chains we frequent and which car models we purchase. Even those living in "rural" sections of the western world are never more than a few minutes away from the next town.

But what about those people living in truly rural parts of the world? Those who live in places like India and Bangladesh where, although crowded with millions of people, many live in isolated areas which are hours away from the nearest police station or hospital.

Many who have conducted research studies in rural parts of the developing world have come to a startling conclusion: far more people have access to cellphones than banks.

This means that not only is mobile banking being offered as an additional service, but for many, it may prove to be the only way to conduct bank transactions.

But what about those people who are too poor to purchase a mobile phone of their own?

The Grameen/Obopay venture is looking to keep costs at an all-time low for mobile phone consumers while seeking additional contributions from a number of charitable foundations all over the world.   (Source:

Even if the mobile phones are being sold at rock-bottom prices, the revenue could be overwhelming for companies providing these mobile banking services. Initial estimates envision a total of $85 billion being spent on mobile phones and banking service charges by those who were previously unable to conduct simple banking transactions in rural China, India, and Brazil. (Source:

The Grameen/Obopay venture plans to introduce pilot programs in India and Bangladesh in October and aims to reach a billion people globally by 2018.

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