Prepaid windfall on mobile banking

Millions of prepaid mobile users are set for a windfall. Thanks to the schemes being launched by mobile operators, prepaid users can soon stop keeping one eye constantly on their cash card balance.

Millions of prepaid mobile users are set for a windfall. Thanks to the schemes being launched by mobile operators, prepaid users can soon stop keeping one eye constantly on their cash card balance.

After eliminating discrimination in prepaid and postpaid services, operators are now tapping into the inherent value of prepaid cash cards, to turn them into an advantage for subscribers.

Going by operators, cash cards have a value, represented by their denomination and airtime minutes. This value, if freed from individual prepaid connections, turns into a freely traded commodity. The impact: Tons of airtime minutes floating about and many more recharge coupons being bought.

Many new schemes from operators are turning cash card transactions into exchanges similar to banking 8212; you can borrow airtime like money, pay for them later like with credit cards and hold them for future use like with escrow accounts.

Such exchanges, say operators, are found to be most useful for communities or groups like work teams, friends and families. In February, Hutch allowed prepaid users to transfer talktime to each other. And on Tuesday, Airtel allowed postpaid users to transfer talktime to prepaid users. Both schemes eliminate a key disadvantage of prepaid: You can recharge without paying from home.

Such plans are turning the talktime value of prepaid cards into a freely exchangeable, tradeable and interchangeable commodity. This analogy with banking is not lost on operators.

Hutch, for instance, allows prepaid users to borrow talktime for a transaction fees of Rs 5. With 3.5 million of its 5.5 million Delhi and NCR subscribers on prepaid, this makes for a massive market size. 8216;8216;We introduced Borrow Talktime for convenience, but response has been beyond expectations, with thousands of transactions daily. Informal transfer of cashcard value is turning talktime into something like currency,8217;8217; says Shankar Bali, Vice President, Marketing, Hutch Delhi.

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At Airtel, the Post2Pre facility allows postpaid customers to recharge with Rs 375, of which the prepaid customer gets Rs 190.29 talktime. Says Christopher Tobit, CEO, Delhi Circle, Bharti Tele-Ventures Limited, 8217;8217;Post2Pre as an innovation gives users an added avenue to recharge anytime, anywhere.8217;8217;

In India, 70-80 per cent of mobile users are prepaid. If users can recharge at the press of a button, it makes for a potentially explosive exchange of talktime worth billions of rupees.