HDFC Bank plans to offer mobile wallets

Service will enable users to pay through cellphones

MUMBAI: Private sector entity HDFC Bank is planning a foray into mobile wallets, a move that will do away with credit and debit cards.

Customers will be able to use their mobile phones for purchases by clicking through the options on their mobile phone, instead of having to swipe their cards for transactions.

“We are planning to introduce mobile wallets and remittances in coming years,” said Rahul N Bhagat, executive vice-president of retail banking at HDFC Bank. “We are looking at getting debit card and credit card services on mobile phones for transactions,” he added.

Bhagat was speaking on the sidelines of the Bankteck Congress at Mumbai.

More banks are expected to tap this market in the coming year. “We estimate the number of mobile phone users to touch 250 million by 2011, and bankers are trying to tap the potential by making their services more transaction based, from just information based,” said Abhijit Bose, vice-president of Ngpay, a mobile service provider.

Currently, there are 1.6 million mobile banking users in India.

Mobile banking will also reduce operational costs for banks. Arvind Kathpalia, Kotak Bank head for operations, technology and finance, said it “enabled us to save money per transaction, which would have otherwise gone to the application provider”.

The idea, however, is facing challenges like interoperatibility, scalability and reliability, Kathpalia  said. Application distribution and security issues, are other hurdles, he said.