Customers queuing up at bank branches to transfer money may soon become a thing of the past.
The National Payment Corporation of India is rolling out an instant interbank mobile payment service that will enable retail customers of seven banks to enjoy 24X7 funds transfer.
As the IMPS architecture is envisaged, down the line, customers may not have to fish in their pockets for change to pay auto/ taxi fare and the neighbourhood vegetable vendor. The mobile will prove handy.
State Bank of India, Bank of India, Union Bank of India, ICICI Bank, HDFC Bank, Axis Bank and YES Bank on Monday became the first set of banks to go live with the IMPS.
While seven banks are in the process of going live with IMPS, 22 others are in the preliminary phase.
To avail themselves of the mobile banking service, customers need to register with their banks, which will issue them a unique seven digit mobile money identifier (MMID) and mobile banking personal identification number (MPIN). Irrespective of whether their mobile is low-end or high-end, customers can download and activate the mobile banking application.
To initiate a mobile payment, all that a sender has to do is key in the beneficiary's mobile number, the beneficiary's MMID, the amount to be sent and the MPIN. The sender will get SMS confirmation for the money sent.
The Reserve Bank of India has permitted banks to offer mobile banking service to their customers, subject to a daily cap of Rs 50,000 a customer for both funds transfer and transactions involving purchase of goods/services for end-to-end encrypted transactions. Transactions up to Rs 1,000 can be facilitated by banks without end-to-end encryption.
The disbursal of funds to recipients of such services can be facilitated by banks at ATMs or through business correspondents. In this case the maximum value of such transfers is Rs 5,000 a transaction. Banks are required to place suitable cap on the velocity of such transactions, subject to a maximum value of Rs 25,000 a month, per customer.
With the help of IMPS, multiple accounts of a customer can be linked to his mobile and it can be ensured that only people who are registered will receive money, thereby avoiding erroneous transfers to a large extent, said Mr A.P. Hota, MD & CEO, NPCI.
Banks will be offering IMPS free to customers up to March 31, 2011. Customers will only have to bear mobile service providers (MSPs) charges. NPCI has halved the switching fee for banks for routing IMPS transactions through the National Financial Switch to Rs 0.25 per transaction as against Rs 0.50 for ATM transactions.
Underscoring the RBI's preference for a ‘bank-led model' for mobile payments, the Deputy Governor, Ms Shyamala Gopinath, said non-banks or MSPs can only provide remittance service whereas banks' canvas is bigger and includes providing savings products and loans. Moreover, ‘know your customer' and ‘money laundering' will be areas of concern with non-banks.Related Stories:
Bharti Airtel gets RBI nod to start mobile payment services
‘Bank-led mobile service can promote financial inclusion'
‘Telcos have to tie up with banks for m-commerce'