Now, pay your bill with an SMS 2 Jun, 2007 l 0206 hrs ISTlAniruddha Ghosh/TIMES NEWS NETWORK
MUMBAI: Small-ticket payments and fund transfers are now an SMS away. You could soon pay for a cup of coffee or dinner at your favourite restaurant using your mobile phone. Not just that, you could also send money to a needy relative via your phone. The unprecedented growth in the number of mobile phone users has enabled banks to transform mobile phones into an alternate channel for payments. Till now, most transactions on the mobile would only give customers information on their bank accounts. All major banks in India are now entering into tie-ups with companies, facilitating payments through the mobile phone. SBI and ICICI Bank have already undertaken pilot projects on mobile banking, in association with Airtel and payments-company mChek. Multinationals like Standard Chartered and HSBC are also evaluating their mobile-commerce options. "We are in the process of changing both the ATM switch and internet platform, which will give us the capability to launch mobile banking," said Jaydeep Gupta, head - shared distribution and priority banking, StanChart. Citibank already has a service-partnership with Paymate, another mobile-payments provider. M-payments operate on a very simple mechanism globally. The details of the credit or debit card get stored onto the user's phone, following which, transactions are completed via an SMS. So when a user wants to pay using his mobile phone, all he needs to do is share his mobile number with the merchant. Instantly, he receives an SMS (with the merchant's name and amount) asking him to authorise the payment. The customer can do this by confirming the alpha-numeric code sent to him, as well as the amount. Within a few seconds, the bank concerned will authenticate the details and debit the amount. But obviously, the merchant will also have to be part of the system. Considering that less than half of the mobile phone users have high-end handsets, companies are trying to encrypt card details onto SIM cards, to target people using even the entry-level handsets. Those with sophisticated handsets can download a software to facilitate the process. At present there is no industry-accepted maximum or minimum threshold figure for m-payments. "The threshold for mobile money transfer or payments will depend on the payment associations, the RBI and other regulatory bodies," according to Piyush Khaitan, MD, Venture Infotek. Also, to start with, each bank will use its own payment-gateway which should eventually come down to 2-3 gateways, according to Mr Gupta. Apart from the convenience of using a mobile phone to make small-value payments, this process also reduces chances of credit card frauds, as the card-details are not shared with the merchants. Further, "mobile banking can be looked at as an enabler to reach out to the unbanked, keeping in mind its low cost and extent of reach," according to Sanjay Swamy, CEO, mChek. However, there are concerns, since all transactions take place using SMS, which at times is quite unreliable. There is the security aspect as well, with the SMS pipe being largely unprotected. "The inconvenience involved in providing banking-grade security has been a key reason why banks have been restricting transactions to information only," says Venkatesh Rengaraju, head-delivery channels, HSBC India. "The real challenge is to have Mobile Payment solution providers develop robust business models for mobile commerce. There is a great deal to learn from our eCommerce experience," says Vijay Ramchandran, country marketing director, Global Consumer Group, Citi India. Payment-firms, though, claim to have come up with an effective security system. "On our platform, communication is encrypted and secured as per Visa's guidelines and typical banking industry expectations," says Mr Swamy. In case of the person's phone getting lost, he will need to get the phone blocked right away, thereby disabling the service. The service can also be disabled by calling the bank concerned. In case of frauds and other glitches in the system, "the charge back process will be very similar to what is already existing in the cards payment domain," says Mr Gupta. At present, the only services to go live are payments of mobile phone bills, and some tie-ups with internet-trading portals. The SMSs sent for making transactions are toll-free at present, but may not be free as and when the system gains popularity. "The cost of the SMS would also depend on the operator. They could decide to absorb minimal costs like 40 paise for a transaction or charge a percentage for the same," according to Mr Khaitan. Talks are on with leading brands across retail and food chains, to launch the service by the second half of the year. (Courtesy: http://economictimes.indiatimes.com ) Vikas Kapoor, MSN ID: [EMAIL PROTECTED] Yahoo ID: [EMAIL PROTECTED] Skype ID: dl_vikas Mobile: (+91) 9891098137. To unsubscribe send a message to [EMAIL PROTECTED] with the subject unsubscribe. To change your subscription to digest mode or make any other changes, please visit the list home page at http://accessindia.org.in/mailman/listinfo/accessindia_accessindia.org.in
