Wednesday, November 21, 2007

MasterCard to tap unbanked population using mobile phone to widen reach

Mastercard is planning to catch hold of the unbanked population in the country using the mobile phone customer base which has been seeing a rapid growth. The sharp domestic growth has made India a focal point for Mastercard, even as international banks like Standard Chartered, HSBC and Citi see it as a growth driver.

MasterCard Worldwide (South Asia, Middle East & Africa Region) president Sonny Sannon says the banking penetration in India is fewer than 30% while that in Malaysia is 98%. There are more people in the country with mobile phones than bank accounts. There are many options available, but the system needs to be inter-operable and not a closed loop system. It should also be secure.

India is a very important geography for MasterCard and its growth is twice that of the SAMEA region. India has witnessed a 40% annual compounded growth in credit cards for the past few years. The total credit card in the country is the region of 35 million, while the debit card market is estimated at over 70 million. The average card spend per annum is now at Rs 20,000. This is against Rs 16,000 a couple of year ago.

Recently a report was published by Boston Consulting Group according to which about 135 million households in India do not have access to basic banking services and this constitutes around 65% of the total population. In October 2007, India had a total of 213 million mobile subscribers. The number of banking customers is supposed to be much lesser.

In Africa, MasterCard had implemented a project, where customers could use a debit card which could also be used offline. The plastic had a chip in it, which would record the offline purchases. This can also be used online in main cities and also in ATMs. According to Mr Sannon, similar solutions could also be implemented in India.

The company is also looking at launching MasterCard Advisors, a wholly owned subsidiary of the company, which is engaged in consulting services. India is one of the most important markets for the company.

Mr Sannon stated, “India accounts for one-fifths of the card spends in the SAMEA region. The SAMEA region is the fastest growing geographies for MasterCard internationally and is home to the emerging markets in the world. The SAMEA region includes 16 countries which have less than 200 million plastics and a population of two billion.

What is common across the region is that people are aspiring for a better future and there are aspiration needed from governments of these countries.” He said that India is moving up because of its large population, the economy doing well and changes in lifestyle.

No comments: