InfoTech: India's hundreds of millions of on-line shoppers

The scheme (discussed in more detail at BankingInsuranceSecurities.com) is to get the huge mass of the Indian population that doesn't use banks to at least use plastic money.

And while the technology is a long way from MasterCard's Mondex, the idea of a re-loadable pre-paid debit card for which there is no formal bank account in the background is thought to be one way to move the great unbanked into the arms of financial services businesses.

India has a bad history when it comes to financial services for the poor. There has been explosive growth in so-called "microbanking" - but the growth has come from a part of the private sector that borders on loan sharking. Some small villages have seen anything up to half-a-dozen outlets open, all pressing their loans on a very uneducated and very unsophisticated market.

So the idea of cards is good, in principle.

Central Bank of India (the actual central bank is called The Reserve Bank) is looking towards the time when the cards will be widely used.

That's not going to be quite as soon as one might imagine. Unlike Mondex, the cards need to be passed through a terminal to make payments. And that means someone needs to have a phone line - and that line must be secure.

By now, the limitations on acceptance will be becoming clear. Even in developing countries, secure phone lines are hacked. Phone lines in rural environments are often not so secure as in cities. And that's pre-supposing they work at all.

So, the wish, expressed by Mr. S Sridhar, Chairman and Managing Director, Central Bank of India that the cards would give shoppers a secure way of shopping online, over the phone or by mail order might just be possible in urban environments but in the country? Not for a long time to come.