MOBILE COMMERCE

WITH AIRTEL MONEY

A Case Study

Group 12
Abhijeet S Pereira
Sona Suresh
Phoenix Squad
MACFAST
CONTENT

1. Introduction

2. Summary

3. Problems Identified

4. Solutions offered

5. Conclusion

1
INTRODUCTION

Airtel money was the first mobile wallet in India to receive the payments
bank license from RBI. It was originated from the successful and popular telecom
company Airtel, allows you to use your smartphone as an electronic wallet to
make and receive payments. Originally launched in 2012, the app offers
customers with an efficient alternative to cash transactions. The Airtel Money app
provides people across the country an adept and convenient way of paying bills
through various ubiquitous mobile platforms such as Android, iOS and Windows.

The Reserve Bank of India gave Airtel the license to offer semi-closed
wallets in 2010. Launched initially for Gurgaon, Airtel Money was the first-time
foray of the telecom operator to launch a digital wallet. In these early days, Airtel
Money had tied up with Gurgaon-based coffee shops, restaurants etc. to receive
payment offered through the app, but soon the venture expanded to over 3,000
merchants in the city.

Airtel operates Airtel Money as a flagship product of its subsidiary Airtel

Payments Bank. The bank was the first entity to receive a payment bank license
from the Reserve Bank of India. The aim and objective of the payment bank is to
reach out to the unbanked population of the country, many of which live in small
towns and villages and have absolutely no clue about banking and other financial
transactions. Airtel Money is expected to help bridge this gap along with other
mobile wallet apps.

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SUMMARY

Airtel realized that rural areas had limited banking facilities, with only 5% of the
total ATM coverage. Airtel had then launched the pioneering mobile commerce
service, Airtel Money, which uses the mobile money transfer (MMT) technology
to allow users to send money to one another through their phones via a highly
secured network.

In 2011, Airtel Money was launched as a pilot project through which Airtel M
Commerce Services Limited (AMSL) and the analysis of the corresponding data
revealed that Airtel Money held a promising future. The only major hurdle was
getting the required clearances from the Reserve Bank of India (RBI) which made
them implement many changes.

The low data coverage in rural areas proved yet another challenge for AMSL.
Hence, AMSL implemented the unstructured service supplementary data
(USSD), which, along with SMS, supported the Airtel Money application.

AMSL joined hands with Infosys to provide this framework in the form of a
private cloud. To start the Airtel Money application on a mobile phone, the
customer first needs to register for it and there are few steps to be followed.

The star feature of Airtel Money is its ability to transfer money from one Wallet
to another. The types of transfer facilities depend on the kind of Wallet the user
creates. Money can be sent either to the receiver’s bank account or to their Airtel
Money Wallet.

There turned into additionally unique provision withinside the Airtel Money app
to cater to the needs of unbanked rural populations. Senders could want to use the
Super Wallet to ship cash and get a 4% interest on the balance in their Wallet.

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The above shown are the features of Airtel Money at present.

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PROBLEMS IDENTIFIED

• Limited banking services to rural areas

Airtel realized that these areas had limited banking facilities, with only 5% of the
total ATM coverage.

• Low data coverage

The low data coverage in rural areas proved yet another challenge for AMSL. It
needed an application which could enable GSM cell phones to communicate with
service providers without Internet data connectivity.

• Changes demanded for implementing the project

The only major hurdle was getting the required clearances from the Reserve Bank
of India (RBI). Airtel was operating on systems, which though completely stable,
were not geared towards supporting monetary transactions or m-Commerce.

• Creation of new parallel sales and marketing hierarchy

In June 2010, AMSL got a certificate of authorization from the RBI to operate a
payment system and issue a stored-value wallet to its subscribers. Airtel also went
on to create a parallel sales and marketing hierarchy for the new company.

5
SOLUTIONS OFFERED

1. What was the reason behind the conception of a service like Airtel
Money?

Airtel realized that these areas had limited banking facilities, with only 5%
of the total ATM coverage. Airtel launched the pioneering mobile commerce
service, Airtel Money, which uses the mobile money transfer (MMT) technology
to allow users to send money to one another through their phones via a highly
secured network.

Mainly, the large rural workforce that migrates to the cities for jobs would
be able to use Airtel Money to remit their wages back home. Even the young
urban working population could use their cell phones to pay bills. Additionally,
a majority of customers continue to rely on traditional or time-consuming
methods like money orders and cheque remittances when it comes to transferring
funds.

2. Although voice connectivity in India is high, data connectivity is low.

How did Airtel Money overcome this problem?

The low data coverage in rural areas proved yet another challenge for
AMSL. It needed an application which could enable GSM cell phones to
communicate with service providers without Internet data connectivity.

A technology like J2ME, which required GPRS download and large

memory, was not a preferred option for the Indian rural market. Hence, AMSL
implemented the unstructured service supplementary data (USSD), which, along
with SMS, supported the Airtel Money application. USSD is a protocol used for
GSM cell phones to communicate with the service provider’s computers.

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 3. Discuss how subscribers use Airtel Money on their phones.

• To start the Airtel Money application on a mobile phone, the customer first
needs to register for it.
• The customer is given four-digit personal identification mPin, which must
be changed within 48 hours to another secure four-digit mPin of the user’s
choice.
• This mPin will authenticate all future financial transactions.
• Once registered, customer can load money on their mobile devices and can
create three types of wallets: The Express Wallet, the Power Wallet, and
the Super Wallet.
• From these Wallets, the customers can pay off mobile, land-line or DTH
bills, purchase movie tickets, and so on.

4. Discuss the different options available for the transfer of balance

through Airtel Money. Which option is most beneficial to rural users?

The types of transfer facilities depend on the kind of Wallet the user
creates. Money can be sent either to the receiver’s bank account or to their Airtel
Money Wallet. For the latter, all the sender needs to do is enter the receiver’s
mobile phone number, amount, and the mPin.
There was special provision in the Airtel Money app to cater to the needs
of unbanked rural populations. Senders would need to use the Super Wallet to
send money. The receiver would get an SMS on their mobile phone with a unique
code. This code could be presented to any Airtel Money Axis Bank retailer to
withdraw money. The customer would also get a 4% interest on the balance in
their Super Wallet.

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CONCLUSION

• No bank account required: This is the biggest and the greatest USP of using
Airtel Money. Moreover, banks ask you to keep a minimum balance in your
account. 1,000 and go up to Rs, 10,000, if not more. However, with Airtel
Money you do not have to worry about minimum balance.

• Works without an Internet connection: You can load money onto your Airtel
virtual wallet and then use it for a host of services. Airtel Money works on
USSD technology. You can use this service even without a data connection.
You simply have to dial *400# to use the app menu. Thus, you can easily
undertake your transactions without any internet connection.

• Completely secure: The payments are made through a secured network. In

addition, it needs a password called the mPIN, which you have to enter for
every transaction. You get a specific ID for each transaction you make from
the app, thereby by making your payments more secure. Since it works on a
totally safe network, this means that even if you lose your smartphone, your
money remains safe as nobody knows your pin number.

• Offers and deals: more accept payments through the Airtel digital wallet and
offer you cashback offers and other discounts. Recharging your Airtel prepaid
phone using the app also gives you more offers such as extra talk time than
recharging the usual way.