With the mobile telephone penetration expected to reach 100 per cent by 2015, cell phones can emerge as a popular medium of payment, a survey on Sunday said.

While India has been among the fastest growing mobile markets, with 846 million subscribers, the country pre-dominantly remains a cash economy, Assocham said adding that as much as 67 per cent of retail transactions are conducted in cash.

"While the ubiquitous mobile is surely the most promising channel, the need of the hour is to develop an innovative mobile payment system," the chamber's Secretary General DS Rawat said.

It said that the booming retail market with annual transactions worth USD 410 billion make phones a perfect medium for payments.

A growing middle class with over 300 million people and their increasing disposable income has led to the exponential growth of retail market, it said, adding that by 2015, mobile phone penetration stands to touch about 100 per cent.

"But the country is pre-dominantly a cash economy with 67 per cent of retail transactions being conducted in cash. All current non-cash payment modes like credit cards, debit cards and multiple mobile payment solutions appeal to a small section," it added.

Mobile payments are a must for India to retain its growth where most people do not have a bank account but have a mobile phone, it said.

"Stakeholders involved in the development of mobile payments ecosystems are the RBI, network operators, financial institutions and technology providers," it said.