The much-hyped, long-in-development mChek seems to have gotten a little closer to mainstream commercialisation.

Okay, it’s much hyped only if you follow the telecom sector and read BusinessWorld every week, but within that set of people, it’s hyped enough. mChek is basically this company/ product which allows you to use your mobile phone as either a credit card or a card swipe machine.

So if you’re the guy paying, mChek theoretically allows you to stop carrying five credit cards in your wallet and just use your mobile phone. And if you’re a merchant, mChek lets you skip the pain of installing EDCs with dedicated phone lines, and just use the mobile phone you already have. (That’s the theory – I’ve never seen it in practice.)

Anyway, why I’m saying that it got a little closer to mainstream commercialisation today is that Airtel spammed me and told me that I could now pay my Airtel bill with mChek. Which is the first case I’ve ever seen of a merchant announcing that they would take mChek payments.

The only thing is that I won’t actually be using mChek, since I’ve already set up ECS payment on my credit card. Even if I hadn’t, I probably couldn’t, since mChek seems to be set up only for VISA, and both my cards are Mastercard.

Some thoughts on mChek in general:

1. mChek actually brings together two of my favourite things: telecom and finance. I approve heartily, because as I’ve pointed out, they’re mostly the same thing.
2. I think the reason mChek is set up on credit cards rather than on debit cards/ bank accounts is because of RBI regulations which don’t allow bank account transactions on anything other than chequebooks and debit cards. I’m not sure about the details – I’d have to mail some people to check. This is quite a tragedy, because something like this could demolish the costs of transacation banking for banks, and actually spread banking far faster than the FinMin’s diktat to provide no-frills banking accounts.
3. Since I am a geek when it comes to stuff like this, I’ll go ahead and say it: this doesn’t go far enough. I’m dreaming of the day when your mobile phone credit limit and your credit card limit are the same. Instead of linking your phone to your card, your phone becomes your card. You shop with your phone, and your purchases are included in your mobile bill, whose credit limit is underwritten by your card company.
4. I wonder what their sales strategy is for bringing merchants on to the system. Their own website admits that this sort of system works best for people like taxi drivers and auto drivers. But how is a startup going to sell to a massively fragmented and unorganised market like this? It’s easier for them to target corporates like Airtel, but for an Airtel, an extra payment system doesn’t have that much value. Or are they planning to piggybank on their partners? The website mentions SBI and ICICI Bank as partners – is this going to show up as a cross-sell target for ICICI’s EDC division? This promises to be interesting.

(And now I regret unsubscribing MobilePundit from my feedreader some months ago. Need to head over there and find out what Veer Chand Bothra’s been saying about mChek now.)