User:P Abraham Paul/Money Through Mobile (MTM)

Money through Mobile - MTM P. Abraham Paul                21 October 2010

(It is proposed to use MTM and mTm as short forms for 'Money through Mobile' technology and the literature and documentation related to it, tentatively for sake of convenience)

Money Through Mobile (MTM) is envisaged as an easy tool to transact virtually all form of e-payments such as utility bills, school fees, payment to shops, malls, job contractors and workers, employees, petrol bunks, ticket vendors, vending machines, cinema halls, taxi / Auto fares, road and bridge toll payments, transfer of money by anyone from anywhere to any MTM account holder, to friends, spouse, pocket money to children, personal money lending, governments welfare payement, Micro Finance payments etc.

MTM system and network.

The MTM system is a centralized facility that can be accessed by Mbile phone users of different service providers over Mobile phone network. At the various vendors and service provider premises where multiple accesses to mobile network is required to take care of the call traffic, a special purpose Set Top Box (STB) equipped with SIMs of various mobile service providers will be used. The STB will interface a local computer with MTM application in it to interact with MTM system via mobile network. MTM applications required in the user devices can be download from the system.

Mobile users can become a registered MTM client by making initial deposit in their MTM account through local Post office or at any approved MTM franchisee. MTM user can link their PO SB account with MTM account. UUID numbers, when ready can be used for KYC info and personal identification for on line registration.

Recharging / refilling of the MTM account in the MTM system could be done by buying and using MTM prepaid recharge coupons marketed by the MTM system provider as being done now for prepaid mobile phone service.

Any MTM user can 'pay in'/credit money into any MTM user account. Withdrawal / debit by e-transfer of money can be done only from own account.

E-transfer of money using the MTM prepaid coupons, by any Land line or Mobile phone from anywhere to any MTM client account is another powerful feature of the proposed MTM system. MTM cash vending machines identical to ATM with a STB, provided by MTM system provider at MTM franchisee points will deliver real cash to MTM users. Government agencies can send welfare payments like NREGA etc to MTM system through banks to get credited into beneficiary’s MTM accounts.

Technology involved. MTM system's  technology architecture is identical to the system used for pre-paid mobile phone operation. Though Mobile phone users are MTM cliets and use Mobile network and switching systems for access, function of MTM system is envisage to be transparent to Mobile Phone operations.

The message transactions between MTM mobile and MTM server can be Web based, SMS based orbased Unstructured supllementary service data (USSD). USSD is a highly secure CC7 signaling and Calling line identification, personal password and encryption making the MTM operation safe and secure.

MTM system can be directly implemented in the areas where already mobile networks are available and can be spread to other areas along with provision of mobile access. MTM for Financial Inclusion of people in the lower economic strata.

The banks, both nationalized and private will not be able to effectively serve people in the lower economic strata in urban as well as rural areas for their micro payment needs. Services of most of the Micro Finance Institutions are unaffordable to people in the lower economic strata.

With MTM implementation, various government welfare payments and money for food in lieu of PDS, money related to right to educatiion, right to health / medicare etc., can delivered directly to the MTM account of the beneficiaries in the lower financial strata across the country. The money received in their MTM account can be transacted using the mobile phone at their homes.

Using UID for identification and information needed for KYC, MTM feature could be used to realize Financial Inclusion and Micro Finance services available accessible by everyone and especially the people in the lower economic strata at affordable cost. Therefore, the proposed MTM system shall be an exclusive technology oriented Mobile banking system that is transparent to Mobile Service Providers as well as Banks and other Government and other financial systems.

The business part: MTM deals being virtual e-transactions, most of the real money remains within the MTM system. The huge excess liquidity available with MTM owner can be profitably deployed in various banking products within regulatory norms.

There are different options for allowing MTM operation in the country.

1. Reserve Bank of India. MTM systems is set up and operated by National Payment Council of India (NPCI)under the ambit of RBI. Government can even consider setting up of an exclusive private GSM system and network for this purpose.

2. Mobile Phone Service Providers. Revenue from basic telecom operation is dwindling and MTM is a great option for diversification available to Telecom SPs. -The customer base, the technology and access to MTM System depends on Mobile Phones, Mobile systems and its Networks. -The technology and method of working is same as used in prepaid systems, that is     already in use by Telecom Service Providers. -Access to banking being a non-Telephony related VAS, will help to improve ARPU for Telecom Service providers.

MTM offer great business opportunity for Telecom Service Providers. Diversification is the key. Banking is an area of opportunity open for Telecom service Providers to grab now.

UUID based Financial Inclusion, Micro-finance, Money in lieu of PDS, NREGA and other welfare payments direct to beneficiaries etc., are in the horizon. Diversification by venturing into these areas opens out great opportunity to make effective use of excess manpower such as in BSNL, in Banking business and its ancillary areas.

However, to avoid multiple systems and conflict of interest MTM system can be setup and owned by consortium of Telecom Service Providers.

3. Department of Posts. Whoever be the owner of MTM business, Post offices play a major role in MTM operation. Moreover, Post Offices are already doing banking as service, and have network all over the country. Therefore, there is ample reason for Department of Posts to venture in MTM business in collaboration with a technology firm or Mobile service provider like BSNL. MTM accounts can be managed like PO SB accounts that are linked with UUID numbers, later when ready. Post offices can readily provide facility for MTM users to deposit and withdraw real money of their MTM account.

4. Banks and other excusive licensed Service Providers.

MTM systems in various regions set up and run and owned by Banks and other exclusive licensed Service Providers such as, Micro Finance Institutions etc. - Ref:- See article in Indian news paper 'Busines Lines' of 2nd November 2010 in the following link. http://www.thehindubusinessline.com/2010/11/02/stories/2010110252550700.htm