With reference to the growth of e-com in India ,now digital money is growing at the cost of liquid cash.This digitalÂ money could be a credit card (if it is credit cardÂ ,than all chances of itÂ being visa) or a mobile cash.But evenÂ mobile transcactions are takingÂ place thruÂ credit cards.In India we do not seeÂ real mobile cash like the one prevalent in kenya.In Kenya there is enough transaction thru mobile as opposed to India where RBI is aÂ toughÂ regulator.
Till now one can book tickets and transact through a mobile using a credit card but come January 2011 ,everybody can also use their debit cards for mobile transaction.
Another thing in market is prepaid cards .
Advantages for companies buildingÂ a businessÂ model around a prepaid card is that it helps them save onÂ commissions which otherwise would go to VISAÂ .
But the challenges for prepaid card would be
1) to build and scale IT infra and bring the product in line withÂ electronic payment standards.I doubt whether prepaid cards prevalent in India will be easily used from semi-closed (or semi-open) can be reloaded and used as open-loop (when ever RBI allows in future).It seems difficult in given scenario but if it happens, it will be another chapter in the business model of the companies apart from being just an e-com player.
2) the cost of acquisition of customer is more as marketing spend is more.Â
A lot is at stake travel, books and gadgets .It is how you build your business and your ecosystem.
Summing up , shall one build a business model on visa or prepaid cards.(Though US experience may be a guidance but India may be different.
Everybody’s opinion please.