NPCI Opens Floodgates for Mobile Payments in India

[kesav 127]

NPCI opens floodgates for mobile payments in India

The interbank mobile payment service enables bank customers to make most payments using their mobile phone handsets. Seven banks have adopted the system and several more are joining up.

The National Payments Corporation of India (NPCI) on Monday launched its much-awaited interbank mobile payment service (IMPS), which has the potential to change the payments scenario in the country. According to bankers, this system could revolutionise the retail payments process and even overtake the number of payment transactions carried out through cards and the internet.

Shyamala Gopinath, deputy governor of the Reserve Bank of India (RBI), said, "We have permitted about 40 banks to offer mobile payments to their customers. The IMPS has the potential to change retail payment scenario in the country."

Although, at present, IMPS is restricted to interbank transactions, it can be used by anyone and anywhere to make a payment. For example, one can pay the grocery bill to the shop owner through mobile, provided both are registered IMPS users with their respective banks. Similarly, one can pay a taxi fare to the taxi driver, directly through IMPS. So, IMPS paves the way for all kinds of payments through banks, from a mobile handset.

At present, Axis Bank, Bank of India, HDFC Bank, ICICI Bank, State Bank of India, Union Bank of India and Yes Bank offer IMPS to customers. Seven other banks are in the process of going live with the service and some 20 banks are at an early stage of adopting IMPS, said AP Hota, managing director and chief executive, NPCI.

In India, there are more than 60 crore mobile phone subscribers, but there are less than 20 crore 'active' bank accounts. Although on record there are about 31 crore savings bank accounts, many of them are either multiple accounts or they are not operational. IMPS could help revive these accounts.

NCPI and the banks enrolled for IMPS currently offer this service free of cost. However, after March 2011 NCPI proposes to charge banks at 25 paise per transaction. It will be up to the banks to decide whether to charge customers for this service, said M Balakrishnan, chief operating officer of NCPI.

He said NCPI has provided a centralised switching system for banks and it is up to the banks to provide a mobile-based application or SMS option for using IMPS. As of now, most of the banks enrolled for IMPS are providing a Java-based mobile application for end customers. Those who do not have Java-based application in the handsets could use the SMS option.

According to RBI guidelines, a customer can transact up to50,000 a day through IMPS, provided he/she is using end-to-end encryption (provided by the bank). Transactions up to1,000 a day can be facilitated by banks without end-to-end encryption.

source :: http://www.moneylife.in/article/76/11456.html

Edited December 1, 2010 by Honest
<< Topic Title Updated >>

[rajanmehta 4,056]

Mark my words!! This is going to revolutionize Online Payments in India. NEFT and RTGS has its share in improving payment mechanisms in India but this is huge and the positive impact it will have in financial inclusion and finally the common man using e payments with the indigenous solution is going to be a game changer. Why this is going to be so,

-You don't need an internet connection.

-You don't need a PC.

-You only need a mobile and registration with the participating bank with your mobile no. Right now 5-6 banks but expect this no. to go up very high shortly as this has just commenced.

-Your payee also needs to be registered with his mobile no.

-Can transfer Rs 50,000 daily now to any participating bank account through your mobile.

-The Credit to the payee is instant.

-You can transfer during any time in 24 hours.

-Charges are going to be very reasonable as NCPI is going to charge only 25 paise per transaction to the participating bank. Banks will be free to decide their charges.

Some things change the path of development of a country drastically. This is going to be one of them.

Thanks Kesav for bringing this very important piece of news for everyone's attention. +1 for you.

[Parth 10]

It sure will....on the path to true financial inclusion...and more (white) money in the economy too !!!!

[kesav 127]

Here's the ICICI bank link on IMPS.

http://www.icicibank.com/Personal-Banking/onlineservice/mobile-banking/imobile/IMPS-insta-money-transfer.html

[_Kailash_ 63]

Nice Indeed

Now no need to carry loads of money with ourselves while travelling.....

our mobile is all we need...

[sougatadc 358]

+1 for you, Kesav for highlighting this.

What is the link for Axis Bank? I couldn't find.

I called the priority account relationship desk for this but they are in the dark about this.

It will surely open new avenues for payments. However the mobile network should be more steady for this service. A momentary snap in the network, which causes call drops may also cause failed transactions. Exigent payments while on the move becomes sometimes a necessity, but network problem should not be the constraint.

[tarun_kabra 204]

+1, I think it will be a very good step.

Now waiting for HDFC to start providing this facility to their customers.

But android users will feel lack of java for using this. Only option is to use SMS.

[kesav 127]

NPCI's website on IMPS

http://www.npci.org.in/aboutimps.aspx

[MVP 3]

-You don't need an internet connection.

You still need an internet connection on your mobile phone.

[sougatadc 358]

-You don't need an internet connection.

You still need an internet connection on your mobile phone.

Not necessarily. Since IMPS can be made available in various form like SMS, USSD, thin Client and Thick client, it can support the transactions from low end mobiles to high end mobiles to serve everyone’s needs. IMPS based on SMS or USSD protocols (on GSM) will not require internet connection on mobile phone.

[kesav 127]

Lakshmi Vilas Bank(LVB) has joined IMPS band-wagon.

http://www.npci.org.in/bankmember.aspx

Just see the current volume of transactions happening over IMPS....

http://www.npci.org.in/impsVolumes.aspx

[kesav 127]

Kotak Mahindra Bank, Federal Bank, Corporation Bank, Oriental bank of commerce and Indian Bank joins IMPS bandwagon taking the tally of live members to 13.

http://www.npci.org.in/bankmember.aspx

:clap:

As expected, IMPS is getting good traction.....

[kesav 127]

Banks plan to absorb mobile payment service charges

The National Payments Corporation of India (NPCI) will impose a 10 paise per transaction charge on mobile payment transactions on sender banks from April 1, 2011.

But the good part is, the banks plan to absorb the charge for using the Interbank Mobile Payment Service, or IMPS, because penetration continues to be low.

"This is a very nominal charge. Initially we had planned 25 paise per transaction," said A P Hota, chief executive officer of NPCI.

This service was launched in November, but so far NPCI was not charging banks for the same.

Under this service a customer can instantly transfer funds to the customers of other banks who are providing this service.

Currently 13 banks are offering this service to customers which include names like State Bank of India , ICICI Bank, HDFC Bank, Axis Bank, Union Bank of India, Yes Bank and Bank of India. By the end of this fiscal NPCI plans to bring 20 banks under this service umbrella.

The amount limits are `50,000 per day for end to end encrypted transactions and `1,000 per day for unencrypted transactions.

As for how it works, the participating banks assign unique seven digit Mobile Money Identifier (MMID) number for linking the mobile number and bank accounts of customers who request for mobile banking services. By the end of January, 6 million customers have been issued MMID's to avail this service.

"We are planning to ab...

source :: http://www.3dsyndication.com/dna/dna_english_news_and_features/Banks-plan-to-absorb-mobile-payment-service-charges/DNMUM202833

[kesav 127]

Development Credit Bank, Canara Bank, Syndicate Bank, Karur Vysya Bank and IDBI Bank joins IMPS bandwagon taking the tally of live members to 18.

http://www.npci.org.in/bankmember.aspx

:clap: :clap:

[kesav 127]

Dombivli Nagari Sahakari Bank and Indian Overseas Bank joins IMPS bandwagon taking the tally of live members to 20.

http://www.npci.org.in/bankmember.aspx

:clap:

[starnet 7]

Has anyone actually sent or received actual money in their bank account by using this service?

If it works then the days of telling someone to visit my office to collect his small payment of like Rs 7000 will be history. He will get paid without visiting my office and without me being in office.

[KanagaDeepan 1,084]

Yes, that is one of the reasons I am eagerly waiting for it...

[kesav 127]

In a related move,

RBI hikes the per day limit to Rs. 5000 from Rs. 1000 for transactions without end-to-end encryption.

http://rbi.org.in/scripts/NotificationUser.aspx?Id=6387&Mode=0

The per day limit remains at Rs.50,000 for transactions with end-to-end encryption for both funds transfer and transactions involving purchase of goods/services.

[KanagaDeepan 1,084]

Good... Thanks for the update...

[city02 63]

the penetration of this will have to cross 1/4th of the active mobile users or over 100 million phones before people can start carrying less cash!

the only option is to stick with cards until this crosses the number of active cards in the country ...

my guess is that it will take till the end of the decade before this impact can be felt.

Nice Indeed

Now no need to carry loads of money with ourselves while travelling.....

our mobile is all we need...

[kesav 127]

Not really....

Retail payments at POS(Point of Sale)::

IMPS may not be good option for retail payments since it ivolves asking and entering recepient's MMID & mobile number.

Quite time consuming at retail point of sale.

I think for retail payments at POS, NFC is the solution...NFC does not waste time at retail point of sale....

Fund transfers and Remote sales::

For fund transfers and remote payments, IMPS is the solution.

All your fund transfers to your family, relatives & friends can immediately be switched to IMPS.

IMPS is instantaneous even across banks and can be done while you're on the move.

All you need is just the recipient's MMID & mobile number.

Edited May 12, 2011 by kesav

[kesav 127]

Punjab National Bank joins IMPS bandwagon taking the tally of live members to 21.

http://www.npci.org.in/bankmember.aspx

:clap:

[kesav 127]

PayMate Powers Inter Bank Mobile Payment Services in India

PayMate today launched an innovative application for mobile fund transfers that is now powering the Inter Bank Mobile Payment Service of three leading banks in the country.

Currently live at Syndicate Bank, Lakshmi Vilas Bank and South Indian Bank, PayMate’s application is a shot in the arm to Inter Bank Mobile Payment Services in the country.

The IMPS facility was launched with much fanfare in November 2010, under the aegis of the National Payment Corporation of India (NPCI).It promised an instant interbank electronic fund transfer service that customers could conveniently access using their mobile phones. However, although the facility is being offered by over 20 banks across the country, the adoption rate has been low.

Industry analysts have attributed this to the fact that the service in its present format is custom-made for smartphone users who can download an application from their respective banks and use it to make a fund transfer. Users with basic phones have the option of transferring funds via an SMS which limits the transaction value.

PayMate’s IMPS application add to these two modes of funds transfer with a third option that is a hybrid SMS-IVR based solution that allows even a basic phone user to transfer funds up to Rs. 50,000/-.

With PayMate powering IMPS services of 3 banks and with at least 5 additional banks in the pre-launch phase, PayMate is the single largest technology solution provider to banks for IMPS.

source :: http://telecomtalk.info/paymate-powers-inter-bank-mobile-payment-services-in-india/68440/

[kesav 127]

RBI wants more banks to launch services on mobile

Bangalore, Jun 6 (PTI) The Reserve Bank of India wants more and more banks to launch services on mobile, its Deputy Governor Shyamala Gopinath said here today.

Launching Canara Bank''s CanMobile, a mobile banking product, she said RBI has already enabled mobile banking and issued guidelines in this regard.

"..And we do hope that more and more banks now join in the launch of this product", she said.

According to Canara Bank''s Chairman and Managing Director S Raman, the product is user-friendly, safe, secure and swift.

It facilitates customers to conduct transactions on 24X7 basis from anywhere with the use of mobile handset.

Registered customers of "CanMobile" can now access Canara Bank''s services for balance enquiry, viewing of last five transactions, transfer funds intra-bank and inter-bank through Inter Bank Mobile Payment System (IMPS) provided by National Payments Corporation of India (NPCI).

At present, the bank does not levy any service charge for funds transfer.

Customers can daily transfer up to a limit of Rs 50,000 through Java/GPRS enabled mobiles and up to Rs 5,000 through non-Java/non-GPRS enabled mobiles by using Unstructured Supplementary Services Data (USSD)/SMS.

Mobile banking services work on both Java-based and non-Java based applications, bank officials said.

source:: http://news.in.msn.com/business/article.aspx?cp-documentid=5194139

Citi Bank joins IMPS bandwagon taking the tally of live members to 22.

http://www.npci.org.in/bankmember.aspx

:clap:

Edited June 10, 2011 by kesav

[rajanmehta 4,056]

Eko: The mobile bank for low income customers

Source

Customers just have to approach local retail stores that are sub-agents of Eko with their identity proof, a photograph, and a personal mobile phone number.

Not directly related to NCPI but relevant to finacial inclusion initiative through mobile.. So posting here..

Eko is a low cost mobile banking solution for people in the low income groups. It is just the right service for India, where the workforce is 540 million-strong. Only about six per cent of these workers are employed in the organized sectors. The low cost mobile banking company Eko aims to serve the unorganized segments of our economy.

Eko was founded in 2009 with the aim to reduce the cost of financial transactions. The reason? The bigger banks used to target only higher income group customers due to more earnings from them. Eko decided to reach out to low income group customers through mobile phones to deliver banking services to them.

Almost at the same time a regulation was made by the Reserve Bank of India, which said non-profit companies could only become business correspondents for regular banks, and that retail outlets such as grocery stores and petrol pumps could work as sub-agents of these business correspondents (BCs). These regulations allow SBI and Eko to work together to allow customers to open zero-balance accounts. Customers can save money in these zero-balance bank accounts and earn an interest rate of 2 to 3 per cent per annum on their savings.— all the banking activities such as deposit, withdrawals, remittance and checking balance can be done through SMS.

Low income group customers just have to approach local retail stores that are sub-agents of Eko with their identity proof, a photograph and of course, a personal mobile phone. Eko has managed to reach its target audience easily by collaborating with local retail stores, which are in direct touch with the customers.

Mugdha Bhargava, vice president of communication, Eko, said, "We plan to cover Bihar, Jharkhand and Delhi for the next six months and then move to other parts like UP and Maharashtra." She said there was no referral system in place right now and that the company targeted the customers through various activities like nukkad natak, promoter-led and van activities, financial literacy comics etc. The company had plans to associate with banks other than SBI and ICICI Bank, but details were not given.

According to another official from the company, Eko is currently present in Delhi NCR region and Bihar-Jharkhand region, which are full of migrant workers. Eko currently engages about 1,300 CSPs (customer service points) or retail outlets to serve customers. These retail outlets are chosen on the basis of certain risk parameters like criminal record, identity proof, shop address proof, and business details like footfall, cash management capabilities, goodwill in the market etc.

These retail stores work like mini bankers for low income group customers who otherwise have no access to banking services. The transactions are kept secure with the help of unique and secret PIN numbers.

Eko has also entered into a partnership with VeriSign to make sure that transactions are kept secure. The details of the transactions conducted are also sent to the customer in the form of an SMS.