"Mobile payments could be a game-changer, both in the financial sector as well for mobile phone companies," an SBI research report said after Raghuram Rajan announced a slew of measures in his maiden address as the head of the central bank.
In this address, Raghuram Rajan had announced the constitution of a technical group to study the feasibility of using an encrypted, SMS-based application for fund transfer, which which can run on any cellular phone handset.
Speaking of the advantages of mobile banking, the SBI note said that only 60 per cent of the population is covered by banking services today, though more than 75 per cent have mobile phones.
Additionally, mobile payments are also cheaper, the SBI note said, adding that a transaction through a mobile phone costs merely 2 per cent of a bank branch based funds transfer, 10 per cent of an ATM-based funds transfer and 50 per cent of an online banking transaction.
"Future business opportunities of banks will depend crucially on how well they connect with their technology savvy customers," the SBI report said.