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Dewang Neralla, director, atom Technologies and co-founder, Financial Technologies, discussed the modalities and merits of using mobile phones as a medium of transaction, at a Moneylife Foundation seminar at the weekend

It is the slated to be the next big thing in payments systems that could revolutionise the way we do day-to-day business. Mobile commerce, this much-talked about system, is witnessing a phenomenal growth of 100% every year and is likely to grow multi-fold in the near future, says Dewang Neralla, director of Atom Technologies. It will facilitate smoother transfer of money through a mobile device. While it could make life a whole lot easier, it is necessary to understand just how it works. How will it benefit users? Will it ensure that transactions are safe and secure? These were some of the issues that were discussed at length by Mr Neralla at the Welingkar Institute of Management Development & Research in Mumbai on Saturday.

Mr Neralla made a detailed presentation highlighting how the future is likely to be shaped more and more around mobility. "The future is increasingly linked to mobility. There is no better way to describe this than how we are going to perceive money and spend money. There is going to be a strong tectonic shift in the way people look at money."

He discussed at length how the banking and payment systems in have evolved in the country and how the mobile platform and financial system is slowly but surely converging to create an ecosystem for mobile commerce. "From the era of cash-based transactions, we moved into a period where cheques replaced cash, and then credit and debit card payments took over. Now, mobile phone transactions seem set to change everything," Mr Neralla said and he listed the advantages that a mobile phone enjoys which will drive the adoption of this new concept. "It is ubiquitous, has multi-purpose functionality with low adoption hurdles, is highly interactive and provides security as well."

Consumers are increasingly looking for ease of use and convenience in the execution of daily transactions. People would like to avoid standing in long queues to make payment for their shopping at the counter. They want a hassle-free experience. This is where the mobile commerce platform comes into the picture. "Simplicity, speed and security" will be the fundamental blocks on which the mobile commerce platform will be built, Mr Neralla said. He explained that it will benefit all participants in the ecosystem-customers, banks, merchants and telecom operators. Customers are already using their mobile phones to re-charge talk-time as well as DTH subscriptions, buy train and movie tickets. Soon, they will be able to also pay utility bills, shop online, send gifts, and so on. "The customer will have the liberty to experiment in shopping as he pleases," he said.

While the promise of mobile commerce is phenomenal, it has not yet reached the 'tipping point' or a stage of exponential growth and there are some issues that need to be ironed out before large-scale usage of the platform becomes possible.

The penetration of electronic transactions remains strikingly low in India compared to  the US and South Korea. Today, only 3% of the transactions in the country are done electronically, whereas in the US, electronic transactions account for almost 52% of total traffic. "Even if we can achieve 20%, it will mean a huge jump. The sheer size of our economy and consumption power is very large. The moment we get organised retail onto the electronic payments bandwagon, the transaction volumes will be phenomenal," Mr Neralla suggested. atom Technologies, which is involved in building the platform for m-commerce, is witnessing a daily volume of 25,000-30,000 transactions.

Mr Neralla admitted that it would take some time for the customer's mindset to be tuned to accept this new technology as many are wary about security issues when transacting online. "This confidence has to be first created in the minds of users. A lot of educational drive will be required to get customers onto this platform."

But how safe is it to use the mobile phone as a transaction medium? "Yes, it is very safe," assured Mr Neralla, "I don't think people should be worried about someone snooping on their transactions, because all security checks have been built into the platform itself." He elaborated the security features that would ensure safety during transactions-like PIN protection, data encryption, security at data level and security certifications like PCI-DSS and PA-DSS. He pointed out precautionary measures that one should employ while using this system. "Just as one is careful while using the internet or credit/debit cards, customers should exercise the same level of caution with their cell phones." For instance, one must not store his or her password or PIN on the phone itself.

The workshop saw healthy participation from an eager audience. After the presentation, the participants asked many questions during an extended Q&A session. A participant raised the issue of having to use and remember multiple PINs or passwords for transacting on the phone. Mr Neralla replied that this need not be the case as ultimately there will be aggregation of all services at one service provider itself, which will enable users to transact with the help of one PIN.

Asked whether stored value on the mobile phone is the first step towards full-fledged mobile commerce, Mr Neralla said that although stored value exists in the form of pre-paid cards, it faces problems in terms of the need for KYC documentation. RBI currently does not allow transaction amount of more than Rs1,000 daily without KYC documentation.

Will transaction costs impede the growth of mobile commerce, another participant asked. "I don't think cost is an impediment right now. Here the biggest impediment is in terms of availability of smart GPRS enabled phone. There are 10 million people having GPRS in the country. Impediments are more in terms of network availability."

atom Technologies is helping to advance mobile commerce in a big way in the country. atom is already actively helping business houses and individuals to build convenient transaction systems that are quick and secure. The company is expected to play an increasingly important role in expanding mobile commerce in India.

As director of atom Technologies, Mr Neralla has played a key role in identifying and implementing the architectural and product strategies and plans for the technology business. Through atom, a Financial Technologies group company, he has defined the technology roadmap of the entire organisation and drives the vision, strategy and architecture for the company's products, solutions and services.

Mr Neralla is also co-founder and principal technology architect at Financial Technologies. He has initiated new technology architecture, components and protocols for dealing room solutions, internet trading engines, exchange trading systems and messaging solutions.
 
Moneylife Foundation is holding a day-long seminar titled 'Investor, Empower Yourself!' in Vashi on Saturday, 8 January 2011. The seminar will discuss 'How to be safe and smart with your money', explain the importance of 'Wills, Nominations and Transmission' and 'How to invest smartly in mutual funds'. Click here for details and registration.