Obopay enters Indian market

Mobile phone will be extension of your debit card.

Obopay, a US-based two-year-old mobile payment service provider, is set to offer its service in the Indian market, starting February-end. Obopay intends to tap the Indian market through the debit route, instead of the credit card route, which other players such as JiGrahak and mChek are presently offering in India.

"It is like extending an ATM machine onto your phone," said Aditya Menon, executive director, Obopay India. Using Obopay, one can transfer money, pay utility bills, buy transportation tickets and do a whole lot of transactions. Obopay has tied up with six banks in India and the services will roll out during February, post which this network will expand.

To start off with, one needs to register with your respective bank, a PIN (Personal Identification Number) will be generated for mobile payment, and based on your requirement, you can either download the required software or can interact over short messaging service or an Interactive Voice Response. The banks may charge a nominal fee to the customer for this service.

The crucial aspect here is that the one who has to receive the money should also be registered. It is here that Obopay may face difficulties in trying to penetrate this service.

"While a pan-India mobile phone service provider or an airline carrier will be willing client for this service, a neighbourhood storekeeper may not easily opt for this service," an industry analyst noted.

Menon is optimistic about this aspect. "If one has to receive the money, won't he be keen to register," he said, adding that they are investing in spreading this network. "It's a foregone conclusion that there are more mobile phones than bank accounts in India. Our aim is to reach every Indian with a mobile phone and enable them to make financial transactions from their cell phone, in partnership with banks," he noted.

Obopay, which has so far raised $48 million through venture funding from the likes of Citibank and Societe Generale, is looking at raising further funds during this year to expand its marketing network.

According to industry information, Obopay is expected to raise $15-20 million within the mid of this year. The company presently employs close to 150 people in the US and India with development centre in Bangalore.

The company, further, said that they intend to extend the financial inclusion effort through this service.