Regulation hinders uptake of mobile money transfer services in India

Vodafone Idea, the India mobile operator created last year by the merger of Vodafone India and Idea Cellular, has announced plans to close its m-Pesa mobile money transfer business alongside the Payments Bank previously operated under the Idea brand, according to media reports in India.

During the company’s recent fiscal Q1 media call, Vodafone Idea CEO, Balesh Sharma said the economic model for the Aditya Birla Idea Payments Bank was no longer viable and together with winding-up the unit, Vodafone Idea would also move to stop operating m-Pesa.

Sharma attributed the decisions to regulatory changes for the banking business and deterioration of the telecommunications sector.

Abitya Birla Idea Payments Bank was part of a scheme by authorities in India to increase access to financial saving services, though similar services from Bharti Airtel and Paytm have also faced difficulties, with both forced to suspend services by regulators for a period during 2018.