factor which determines the success and sustainability of the company. no existing m - commerce player is organized for it. very few yet are thinking in these terms. one who desires to enter this field must evaluate its “ delivery ” capability. 2. 3 second important issue in m - commerce or e - commerce is the need for collaboration between technology service provider and provider of goods and services. if it is m - medicine, we require collaboration between mobile service provider and health / medicine service provider. similarly, in e - broking, we require collaboration between technology partner and broking service provider. similarly, in m - banking or m - payment, we require collaboration between mobile service provider and banking / payment service provider. we cannot and should not think of, at the initial stage, mobile payments without bank accounts. 2. 4 it will also be useful before debating on any alternative modes for banking / payment delivery or concluding that banks have failed in providing financial inclusion, to consider the following three aspects related to the payment delivery and banking technology in india : – i. banking technology is of recent origin in the country. scaling up may, therefore, require more time. ii. payment is only one aspect of banking. financial inclusion goes beyond remittances. other products and services are required which banks are better equipped to provide. iii. given the above aspects and that the enabling provisions like appointment of business correspondents have been permitted only recently, it would be early to conclude that banks have not been successful. i hasten to add that if the banks continue as laggards, the system will have to look for alternate non bank model. the important end of inclusive growth cannot suffer on account of our insistence on a particular means / model. 3. evolution of electronic financial services ( e - banking / e - commerce / m - banking / m - commerce ) 3. 1 payment methods in the settlement of transactions for goods and services have evolved over the years as a result of innovations and developments in technology and business practices. from the earliest known barter systems to the cash - based approach and later, to other paper - based payment instruments, the progress in the payment methods was a relatively gradual one. however, due to rapid strides in technology, more efficient payment methods have evolved, mainly in the last few decades. electronic mode funds transfer has afforded an efficient and secure means of transferring funds between bank accounts and is fast displacing paper - based payment methods. 3. 2. reserve bank of india

cards being issued and the number of outlets through which they are issued, as a regulator of the payment and settlement systems in the country, it is difficult to contain the risk of anonymity in a msp led model. let me add here that the m - pesa model has the comfort of a national - id scheme which is in existence in kenya. interestingly, as per the indications available on the uid project, the team is veering round to the bank led model to further financial inclusion in india. also, apart from kyc norms, msps would also have to enhance transparency in pricing and improve their infrastructure. 3. 10 the advocates of a msp - led mobile commerce list two advantages of the system, namely ( i ) leveraging the spread agent network ( ii ) transaction cost. the wide spread agent network is an attractive proposition for extending financial services. but does this require that the service is provided by the msp only? i have already highlighted the availability of a large network of banks in the country. cannot this agent network be utilized by banks in partnership with msps, for extending financial services? keeping in view the concerns about money laundering and financial terrorism, we would prefer a partnership where the msps gain from the over the air ( ota ) transaction volume and banks leveraging the channels for wider reach. there needs to be clear distinction of roles. reserve bank is exploring a better model across the world. 3. 11 in this context two successful models of partnership between banks and msps observed are wizzit in south africa and g - cash in philippines. wizzit bank is a virtual bank which is a subsidiary of bank of athens in south africa. it provides the unbanked population in sa with bank accounts on mobile phones which can be used to make person - to - person payments, transfers and pre - paid purchases. besides, account holders are also provided a maestro card for cash withdrawal. the msps supports this facility as carriers of such transaction instructions. 3. 12 philippines have been the pioneer in enabling financial services through use of mobile phones. the first product introduced in the country was smart money – a partnership between, smart telecom, banco de oro. subsequently, g - cash a telecom led model was subsequently introduced by globe telecom. the country has seen the development of partnership between the mobile payment platforms provided and rural banks there. 4. ownership of customers 4. 1 the issue of partnership between banks and msps brings to fore the muted