500 million Indian mobile users to get real-time remittance

500 million Indian mobile users to get real-time remittance

Summary: Instant funds transfer via SMS come to India with banks and the government carving out a framework to enable users send and receive money between different banks over their phones.

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When Twitter co-founder Jack Dorsey launched Square, there were two things that came to mind – India and other mobile platforms. Being an iPhone only app on release made it a niche market service which meant India was a long way from getting this service. It seems the government and banks in India have worked together to bring instant retail money transfer via SMS.

The service is known as Interbank Mobile Payment Service (IMPS) and so far as seven banks on-board:

  1. State Bank of India (SBI)
  2. Union Bank of India
  3. Axis Bank
  4. ICICI Bank
  5. HDFC Bank
  6. Yes Bank
  7. Bank of India

In the background, National Payment Corporation of India will act as the settlement agency and provide the system support for the project. The potential for the service in a market like India is huge. According to stats released recently by the Cellular Operators Association of India (COAI), October saw a growth of 3% which translates to about 14.7 million new subscribers added, taking the total to over 500 million users.Going forward, the service is expected to enable users to make over the counter transactions like at grocery stores or paying the cab fare.

At launch the service has a cap of Rs 50,000 a day for the user with Rs. 1,000 being the maximum amount that can be remitted without end-to-end encryption. Signing up for the service is free and can be done by getting in touch with your bank who will issue a mobile money ID (MMID). Each SMS will be charged at Rs. 2 and the banks will be bearing the transaction cost of 25 paise.

Looks like India is skipping the plastic mode of payment for a virtual one.

Topics: Mobility, Banking, Collaboration, Hardware

Manan Kakkar

About Manan Kakkar

Telecommunication engineer with a keen interest in end-user technology and a News junkie, I share my thoughts while preparing for my Master's in Information Management.

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4 comments
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  • RE: 500 million users to get real-time mobile remittance

    This is classy!<br>All tho Square uses internet to make the transaction with the app installed on a mobile device. The card details are send to Square server and transaction with bank happens just like another eCommerce website.<br><br>But again making transaction happen over SMS in India is a big thing <img border="0" src="http://www.cnet.com/i/mb/emoticons/happy.gif" alt="happy"><br><br>I am really surprised SBI is number one on the list <img border="0" src="http://www.cnet.com/i/mb/emoticons/happy.gif" alt="happy">
    siddharthmenon
  • RE: 500 million users to get real-time mobile remittance

    What is the closest thing we have to this in the United States?
    goldflow
    • RE: 500 million users to get real-time mobile remittance

      @goldflow I'd say Square, in India credit cards are not used for small transaction but in the States they're used for pretty much everything. But in India SMS is used by everybody.
      Manan Kakkar
  • RE: 500 million users to get real-time mobile remittance

    This is nice, well written article. Thanks for sharing.
    anshu_sharma@...