Need to make a speedy money transfer to a sick relative or a troubled friend? Or do you want to pay your utility bills while vacationing in Turkey?
The advent of immediate payment services (IMPS) on mobile phones gives you the option to carry out such transactions using your cellular data connection or even via SMS.
To get started, download an application on your phone. Make sure that your mobile is compatible with the software.
Alternatively, if the bank offers IMPS via SMS, all you need is your phone’s messaging service. One thing to keep in mind before sending money to anyone is that they need to obtain a mobile money identifier as well.
Sending money The procedure for funds transfer varies from bank to bank. In case you’re using an application, you have to select the account for IMPS fund transfer, enter the beneficiary’s 10-digit mobile number and seven-digit MMID, followed by the amount you wish to transfer.
What follows is an authentication procedure that also varies across banks. For example, in the case of ICICI Bank, you will need to enter a code based on the grid values at the bank of your debit card.
Once this is accomplished, funds transfer is instantaneous and you receive a confirmation by SMS.
To transfer funds using your mobile via SMS, you will be required to send an SMS to a number specified by your bank along with certain details. This SMS could be in the form of IMPS<Space><Beneficiary Mobile Number><Space><Beneficiary MMID><Space><Amount><Space><MPIN>, as in the case of Andhra Bank.
IMPS transactions may incur a fee determined by your bank. For example, in the case of ICICI Bank, transactions up to Rs 10,000 attract a fee of Rs 2.50, while you’ll pay Rs 5 in case of transactions between Rs 10,000 and Rs 1 lakh. In case the sum is between Rs 1 lakh and Rs 2 lakh, it’ll cost you Rs 15 to make the transfer. An additional service tax is charged for this transaction.
But not all banks charge a fee for using IMPS. For example, no such fee is levied by Citi Bank, though it limits such transactions to Rs 50,000.
Pros and cons The biggest advantage of IMPS over conventional inter-bank mobile transactions is that settlement is conducted in real-time, instead of in batches through the NEFT mechanism at the discretion of your bank.
“The system really does not have anything going against it, except that it was initially available only through the mobile applications provided by banks. In India, the penetration of mobile banking applications is still at a low level, compared to internet banking. To offset this, some banks are offering IMPS service through their Internet bank application and through their ATM networks,” he adds.
“In my opinion, the only reason that IMPS has not reached its full potential, is that there has not been enough promotion about the benefits, efficiency and simplicity of the system. I would guess that eight out of 10 people would not know about IMPS,” he says.
Security for transactions
Transactions are carried out over secure lines and the RBI has ordered that all transactions by mobile phones over Rs 5,000 need to be encrypted. However, caution still needs to be exercised. “As it is said, the strength of a chain is in the weakest link. Most systems get compromised at the customer interaction dimension, be it careless use of payment cards, disclosure of sensitive information like password and so on,” warns Vijay Chandar, Senior Vice-President, ElectraCard Services, an electronic payment services provider.