It is all about inexpensive convenience

In India, banks are making a serious and sincere attempt at serving the unbanked / underbanked.  However, progress has been slow and restricted to the margins.  G2C not withstanding, domestic remittance is one of the litmus tests of whether formal channels (banks & post office) are relevant in the lives of rural Indians.  Elsewhere in the emerging/developing world, remittances have been the killer app to start the process of digitization of cash in rural settings.

A survey conducted by IFMR, indicated the following as the top reasons (not in any particular order) that drive choice of channel for [domestic] remittances:

• Lines / queues to send / receive money
• Time taken [by service provider] to deliver the money
• Price (fees/commission charged)
• Proximity of deposit and withdrawal points
• Business hours of deposit and withdrawal points (should be open during hours when they are free)
• Minimal paperwork as a significant percentage of migrant workers are marginally literate

As banks figure out their strategy to serve the unbanked / underbanked, the above feedback would imply the banking 'agent' should be 'like a' retail outlet, ubiquitous / local presence (in their village) and open 12 hours a day at least 6 days a week.

Remittances is a periodic but not  a frequent activity, with an user transacting every few weeks-months.  Given this, to ensure that the service is cost-effective, the customer service point cannot be a dedicated facility, like a bank or post-office

Tom Noyes has argued eloquently about the role of MNOs in India to serve the unbanked.  However, in the first go-round, Indian regulators may give banks a shot at success/failure.  This implies that the wallet will be owned by the bank.  However, the mobile network could still be used for last mile connectivity.  The mobile device might also still be a device option.

Look forward to hearing your opinion on this topic, and your insights about what Nokia Money, Vodafone, Airtel, banks and others are doing in India in this space.  Where do you think that the puck is heading?