Mobile payment services, which is estimated to be USD 350 billion of payments and banking transactions by 2015, could generate about Rs 20,250 crore as fee income for banks and telecoms, according to a report by the Boston Consulting Group (BCG).

"It is far less costly to offer banking and payments services using mobile technology than to build new branches," BCG India Partner and Director, Neeraj Aggarwal, told reporters here after releasing the study 'The Rush to Mobile Money: Madness or Master Stroke'.

"Mobile-enabled business correspondents, who are authorised to conduct business on behalf of banks, can service a customer for less than 50 paise far below than Rs 40-60 at a branch," he added.

The mobile payment services users were 1.1 crore in May, 2011 as compared to 400 users in August last year and the value of transaction is estimated to be Rs 1.6 crore.

The favourable regulation, unique identification initiative, consumer readiness to accept technology, electronification of payments would augur well for the mobile money payment, Aggarwal said.

BCG expects 70 per cent of the Rs 20,250 crore to come from urban areas and envisages USD 40 billion payments by the government to the rural area, including the disbursements under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).

The person to person transaction is expected to be USD 70 billion for domestic and international remittances, it said.

Going forward, BCG expects interconnectivity between the service providers and banks, to facilitate transfer of cash, as presently person to person transaction can take place if they both are users of the same platform provider.

"Right now the telecom operators might think other subscribers should not transfer money in the banks where they have partnership but it will change when the market opens up," BCG India Partner and Director Arvind Subramanian said.

The report estimates that bill payments and point of sales purchases would account for USD 40-billion by 2015.

"With every mobile handset potentially acting as a debit card, this is likely to emerge as the second largest category," it said, adding that business payments towards employees and other firms could be USD 60-billion by 2015. The consumer banking segment is expected to be USD 150-billion by 2015, it added.

The digital market (mobile and telephony market) was Rs 2.7-lakh-crore market in 2010, according to BCG, and it expects the opportunity to scale up to Rs 4-4.7-lakh-crore market by 2015.

Subramanian said the number of mobile phone users in India was likely to be 900-million by 2015, from the current 500-million users.