Skip to main content

Mobile Payments

Banks have launched services that will allow account holders to transfer Rs 50,000 a day

You can use your mobile to transfer money from your bank account to another. Last week, several large banks have started offering this service with the help of a government body, National Payments Corporation of India (NPCI).

Called as Instant Mobile Payment System (IMPS), the technology does not require phones to be internet-enabled. The transfers are done by using short message service (SMS).

Until now, the transfer of money through mobile phones was possible only if both the sender and the receiver held accounts with the same bank.

NCPI's platform, for the first time, enables users to transfer money between accounts of different banks.

As of now, seven banks, including HDFC Bank, ICICI Bank, Axis Bank and State Bank of India, have gone live with the system. Seven more banks are in the process of activating the service and 22 others are expected to join the network soon.

To start transferring money from your account, you will first need to register with your bank. The bank will provide you a Mobile Money Identifier (MMID) and a Mobile PIN (MPIN).

The part that requires getting used to is formatting of text message. There are pre-defined text message formats that you need to type while transferring money.

IMPS is a step further to the existing methods of remitting cash, which include wire transfers, Real Time Gross Settlement (RTGS. This is also the fastest mode of transferring money at present. NPCI claims the transaction would be done in 15-20 seconds. The service eliminates a person directly handling cash while saving on transaction costs and time.

CHARGES

At present, banks are offering this service for free. However, most of them have said that they would apply a small fixed charge in future, like in case of internet/online banking. For internet-based fund transfers, most of the bank levy around Rs 5 each transaction for amount up to Rs 1 lakh.

Even at this rate, the transactions would be cost effective. The total cost of completing the transaction depends on charges for sending the text message and the fee bank will apply for each transaction. Your bank may also charge you fee, either one-time or annually to avail this service.

For transferring `1,000, a person, the cost could be 0.7 - 1 per cent of the amount. However, these are fixed costs and would turn lower if the amount is high.

Using this service, you can transfer up to `50,000 each day, according to the Reserve Bank of India's guidelines. The norms also state that transactions up to `1,000 does not require encryption.

SECURITY

NPCI's platform act as intermediary between sender's and receiver's bank. Bankers claim that this system is foolproof and secure because all it involves from the sender's end is a text message in defined format.

FUTURE

At the moment, few banks are ready to roll out the services to their customers. As more banks offer this service, a person can use this system for smaller-ticket size transactions like monthly payments to maids and drivers. It would also save on frequent trips to the bank for deposit and withdrawal.

However, the system's success would depend on its eventual ease of transaction capability, its promise of a transaction in real time.

ADVANTAGES:

Easy to use, Requires no special handset

Remittance on real-time basis making it the fastest system to send and receive money

No physical cash handling. Saves on time required to visit bank

Safe and more credible, as managed by a government body

DISADVANTAGES:

Sender and receiver both need a bank account, unlike money transfer through post offices

Both sender and receivers bank should be a part of the system

Requires documentation to start the service that may discourage unorganised sector

Large transfers not possible as now. It has a cap of `50,000

Popular posts from this blog

ICICI Prudential Dynamic Plan Invest Online

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   ICICI Prudential Dynamic Plan             Invest Online This fund does remarkably well during falling markets, but fails to show the same prowess during a rising market. The fund sticks to its mandate to adapt to the dynamic nature of the market by shuttling between debt and equity. It takes aggressive asset calls in equity when the market surges by investing in quality mid-cap stocks. At the same time, it adopts a defensive strategy by investing in debt and cash when markets get overvalued, making it a good long-term choice.     For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call     Leave a missed Call on 94 8300 8300   Leave your comment with mail ID and we will ...

Birla Sun Life ’95 Fund Dividend

 Dividend in Birla Sun Life '95 Fund (An Open ended Balanced Scheme) with record date of September 22, 2015 and the details are mentioned below: Scheme / Plan / Option Dividend Rate ( per unit # on face value of .10/- per unit) NAV as on September 15, 2015 ( ) Birla Sun Life '95 Fund - Regular Plan Dividend Option 7.50/- 142.06/- Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015 1. ICICI Prudential Tax Plan 2. Reliance Tax Saver (ELSS) Fund 3. HDFC TaxSaver 4. DSP BlackRock Tax Saver Fund 5. Religare Tax Plan 6. Franklin India TaxShield 7. Canara Robeco Equity Tax Saver 8. IDFC Tax Advantage (ELSS) Fund 9. Axis Tax Saver Fund 10. BNP Paribas Long Term Equity Fund You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds Invest in Tax Saver Mutual Funds Online - Invest Online Download Application Forms For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call ------------------------------------...

Lump Sum or SIP?

Invest Mutual Fund Online     You have a lump sum in hand and you wish to invest in equity funds. However, you have heard a lot of talk about investing in equity funds through Systematic Investment Plans (SIPs) because they help average costs, ensure you do not ill-time the market, and help you invest in small sums, besides giving you many other advantages. So, should you invest the money you have in hand in one go, or let it remain in your bank account and then do an SIP? There is no harm in investing a lump sum amount. For all you know, compounding, over the long term, could work better with lump sum. However, make sure you fulfill all of these three criteria if you want to invest in one go. Else, SIP is the way to go. #1: You invest for the long term According to past data, ideally, if you have a time frame of 12 years or more, you can consider lump sum investing (provided you satisfy the other two conditions that follow). So, what is the sanctity behind 12 years? Is it because only...

Mutual Fund Review: Reliance Regular Savings Balanced

Reliance Regular Savings Balanced fund has shown great resilience during market crash After a shaky start, this fund has established itself as a strong contender in this space. In the past three years it has ridden the market well by not only delivering during the market run-ups but also displaying resilience during the crash. In 2008, it witnessed the second lowest fall among its category and last year it was amongst the top three performers with a return of 76 per cent (category average: 61%).   The poor underperformance in 2006 can well be credited to the low equity allocation of the fund, which stood at just over 10 per cent for only four months that year. Though the fund has the leeway to go up to 75 per cent in equity, it has never touched that limit. In fact, it has exceeded 70 per cent in just five months in its entire history. During the crash of 2008, the fund managers had no problem going right down to 54 per cent (equity exposure). Fund managers Omprakash Kukian and A...

Why credit history is critical?

Will you need a loan to buy a car or a house? Do you know why some people get their loans sanctioned quickly without any hassle, whereas others find that their approval is delayed or their application is rejected? If you want a loan, you will need to work to build a solid credit history because this can have a bearing on the ease with which you get loans. Read on to learn more about what is a credit history and how to build a good credit score. What is a credit history? Your credit history is a way of tracking your credit behaviour and habits — basically it shows how disciplined and regular you are when it comes to repaying your dues on loans that you have taken. It will show a complete record of your past borrowing and repayment record including details about any late payments or if you have defaulted on a loan. This track record is readily accessible to lenders and is used by them to when reviewing your loan application. Borrowers who have historically had a bad record of managing...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now