Money & Banking

Mobile banking set to get a boost

K Ram Kumar Mumbai | Updated on January 24, 2018

A hostess displays the new Samsung Galaxy S6 Edge smartphone during the Mobile World Congress in Barcelona March 2, 2015. Ninety thousand executives, marketers and reporters gather in Barcelona this week for the telecom operators Mobile World Congress, the largest annual trade show for the global wireless industry. REUTERS/Gustau Nacarino (SPAIN - Tags: BUSINESS SCIENCE TECHNOLOGY)   -  Reuters

Enrolling 10 lakh merchants to accept mobile payments, customer education among steps banks plan to take over the next one year

Public sector banks plan to step on the gas to get their customers to use mobile banking over the next one year. Steps such as automatic on-boarding of all new customers on mobile banking and enrolling 10 lakh merchants to accept mobile payments are in the works.

In a bid to deepen mobile banking penetration, public sector banks will download the mobile banking app for new customers alongside the account opening process.

Bank employees may be made responsible for educating customers on how to transact seamlessly on mobiles at the time of opening an account, according to the suggestion of a bankers’ working group constituted at the behest of the Finance Ministry, on leveraging technology.

This initiative can be supported through a bank-wide customer and employee awareness programme.

Update database, enrol merchants

Further, PSBs will update the mobile number of customers in their databases on a mission mode. Subsequently, banks can increase communication with their customers on mobile phones and educate them on effecting mobile payments.

The idea behind this move is to ensure that 20 per cent of the existing customers migrate to mobile banking transactions. As at March-end 2013, there were 104.5 crore deposit accounts in the country.

Banks may run a programme to enrol almost 10 lakh merchants for mobile banking. This will entail educating merchants about no interchange fees for mobile payments, ease of transactions, and designing incentive schemes for merchants.

Cash/cheque vs e-payments

PSBs will individually undertake a study to assess the cost of cash/cheque versus electronic payments such as national electronic funds transfer and real time gross settlement.

Based on this assessment of cost, banks may consider revising their charges such that beyond a minimum number of in-branch cash and cheque transactions, customers are charged more. This would encourage customers to migrate to digital payments such as mobile and Internet banking.

In 2013-14, 9.5 crore mobile banking transactions valued at around ₹6,000 crore were transacted. In FY2012-13, the corresponding figures were 5.3 crore and ₹6,000 crore, respectively, according to the RBI’s annual report. There are 27 PSBs in the country and they dominate the banking system. As at March-end 2014, their share in total deposits and total advances was 77 per cent and 76 per cent, respectively.

Pointing out that the use of technology has expanded from the days when accounts were maintained manually in ledgers and unions called for strikes at the very mention of the word computers, RBI Governor Raghuram Rajan, in a recent speech, observed: “Today, some banks allow customers to do all their banking transactions on a mobile phone, without entering a branch or touching a pen.”

Published on April 09, 2015

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