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Mobile Payments – The Road Ahead
Over the years mobile phones have become an indispensable accessory for almost every individual. This ever expanding reach of mobile phones have made them a gadget which can be conveniently used for staying connected with the world, using internet for banking & other purposes, receiving SMS alerts etc. besides of course its basic function, making calls. With the rapid growth in the number of mobile phone subscribers banks have been exploring the feasibility of using mobile phones as an alternative channel of payments.
Mobile phone provides a way to reach out to people in isolated areas and can help in big way in the financial inclusion. For example in India, more Indians have mobile phones than bank accounts.
Mobile Payments can be defined as information exchange between a bank and its customers for financial transactions through the use of mobile phones. Mobile payment involves debit/credit to a customer’s account’s on the basis of funds transfer instruction received over the mobile phones.
Mobile payments services generally involve the collaboration of banks, mobile payments service providers and mobile network operators (MNOs). The service can also be provided as a proximity payment system, where the transactions are independent of the MNOs.
Payment for goods and services via mobile, offered by many companies, use contactless payment over mobile phones to pay for on- and off-street parking in specially demarcated areas. First conceptualized in the 1990s, the technology has seen commercial use in this century in both Scandinavia and Estonia. End users benefit from the convenience of being able to pay for parking from the comfort of their car with their mobile phone, and parking operators are not obliged to invest in either existing or new street-based parking infrastructures.
32 banks have been given approval to provide mobile banking facility in the country by the Reserve Bank of India. 21 banks have started providing these services. Mobile banking is a secure application, which takes care of end-to-end encryption of data in transit to offer banking information and transactions.
Customer is forced to change the activation code and mPIN sent to him at the time of registration. He is also driven to decide a password to log-in to the application. Customer also has a choice to change the mPIN, log-in password at any point of time.
Banks are now permitted to offer this service to their customers subject to a daily cap of Rs.50,000/- per customer for both funds transfer and transactions involving purchase of goods/ services. Transactions up to Rs.1,000/- can be facilitated by banks without end-to-end encryption. The risk aspects involved in such transactions are addressed by the banks through adequate security measures.
In view of such major developments in the mobile banking & payments arena, there is an urgent need to provide a neutral platform where the regulators, Practitioners from financial services & corporate, Vendors, Technology providers, consultants, academicians come together to discuss the challenges, opportunities & experiences.
Banknet Group has launched two initiatives-
1. Banknet Conferences will organize a series of interactive seminars on Mobile Banking & Payments
2. Banknet Publications will release collection of papers related to Mobile Banking & Payments
For more information contact us at associate@banknetindia.com
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