Mobile banking seems to be the flavour of the season. We have seen three major initiatives from banks and telcos and other mobile companies in the last fortnight pushing the financial inclusion initiatives through mobile.
Federal Bank/National Payment Corporation of India: Last week, Kerala-based Federal Bank launched the Interbank Mobile Payment Service (IMPS), a real-time fund transfer facility through mobile phone, in association with National Payment Corporation of India.
Currently a majority of interbank mobile fund transfer transactions take place through the National Electronic Fund Transfer (NEFT) system. But there is a problem. The transactions are processed and settled in batches during the working hours from 9am to 7pm, and not in real time. That will change with the new IMPS scheme, where a customer can transfer funds from his/her bank account instantaneously to any other bank account that comes under the same framework using his/her mobile phone. And there is no restriction on timings.
The customer who wants to transfer funds or to receive funds has to register for mobile banking with the bank which goes without saying. Once registered, a seven digit MMID (Mobile Money Identifier) is generated. Customer also has an option to register for receiving funds only. The combination of mobile number and MMID will be unique. The remitter should enter the beneficiary’s mobile number and MMID along with the amount to be transferred after which both the remitter and beneficiary will receive SMS confirmation of the transaction. Users need to download the mobile banking application of Federal Bank on his mobile or can also be done by sending an SMS in a predefined format.
Customers can transfer funds up to Rs 50,000 daily by using mobile banking application. Using SMS, Rs 1,000 is fixed as daily limit and Rs 5,000 is fixed as the monthly limit.
Union Bank of India/ Nokia: Union Bank of India (UBI) has signed up with mobile phone maker Nokia for a mobile banking initiative, which is clearly a financial inclusion initiative targeted at those users who do not have a bank account. Nokia retail outlets will serve as Business Correspondent agents for Union Bank Money services, in compliance with RBI guidelines, where prospective customers can register for the service, deposit money, or withdraw cash from their accounts at these BC agents.
Nokia will pre-install an application in its wide range of mobile handsets across price points. The application can also be installed nearly on all already existing Nokia handsets in the country.
The service is currently available to consumers in Gurgaon, and will be soon go live in Delhi, Faridabad and Noida. This will be followed by a nationwide roll-out over the next few months. For those customers in the no-frill category, the turnover will have an annual ceiling and prepaid card will have balance ceiling as per RBI guidelines. Other customers, who complete KYC compliance at the Bank, can use the product without any restriction on turnover.
More than 50% of the population do not have access to a bank account, and a 90% of the 600,000 plus villages in the country do not have a bank branch, according to UBI, which sees it as an opportunity. It’s targeting to take banking services to over 10 million customers across 32,000 villages by 2013.
“Nokia is building an open ecosystem for mobile payments in India with multiple partners (banks, merchants, billers, service providers), to drive basic financial services across the country…the service will drive financial inclusion by eliminating dependence on the physical presence of a branch or availability of internet banking services,” said D Shivakumar, Vice President & Managing Director Nokia India.
Axis Bank/Idea Cellular: Axis Bank and Idea Cellular have joined hands for providing mobile banking services wherein Idea Cellular will serve as banking correspondent. Besides basic banking services like cash deposit, cash withdrawal and balance enquiry, it will also enable money transfer between the migrant population in urban areas to their beneficiaries back home. So this will compete with the age old money order system of the Postal department which is highly expensive (they charge a commission of 5%). The remittance facility is currently being offered in the Dharavi – Allahabad remittance corridor to begin with and will be extended to other remittance corridors subsequently.
The remitter is an Axis Bank customer having a No Frills Savings account with the Bank. The remitter can initiate a remittance through Axis Bank channels (ATMs/Internet). The account holder who is an Idea subscriber can also initiate remittance through a mobile banking platform.
As a Business Correspondent, Idea would facilitate the opening of the No Frills savings accounts. The beneficiary who is an Idea subscriber does a one time Account opening activity at an Idea Retail outlet through submission of KYC documents, which subsequently get verified by the nodal Axis Bank Branch.
Using technology, an interactive mobile banking platform has been developed on both the remitter and beneficiary side to provide an easy mechanism for the remitter to initiate the remittance through Idea mobile and for the beneficiary to interact with the Idea M-Commerce platform for facilitating cash out at the Idea retailer.