You can find pictures of Abhishek Bachchan, Aishwarya Rai and Shah Rukh Khan at Suresh Photo Studio in West Delhi. Business has been unusually brisk at Suresh’s studio since last two months.
And he can cope with the rush, thanks to extra hours that he’s been able to save from the ritual of queuing up at banks to withdraw money. Now, he withdraws money via his mobile phone.
Opposite Suresh Photo Studio, adjacent to a temple, 38-year old Kamla sells roses, marigold and orchid garlands. Back home in Muzaffarpur, Bihar, Kamla’s mother now receives Rs 200 every week on her mobile sent by Kamla.
India is witnessing a new dawn of banking with mobile phone. From a rickshaw puller, a florist, a pan shop vendor to a truck driver, cash transactions are going mobile for all and sundry. “Our target is to achieve 10 million mobile subscribers hooked onto mobile banking by end of this fiscal year,” says Bharti Airtel CEO Manoj Kohli.
Four banks, SBI, HDFC, ICICI and Corporation Bank, have partnered with India’s largest operator Bharti Airtel to offer m-banking. RCOM has tied up with ICICI Bank, HDFC Bank, Axis Bank and IDBI Bank. Bharti Airtel has launched its mobile banking late last month and plans to rope in about 100 major banks in India by end 2008.
Over the coming months, customers will be available to open their bank accounts at authorized Airtel outlets just by submitting a photo ID proof. Subscribers can now deposit, withdraw, transfer, pay bills or remit money through their mobile phones,” Mr Kohli adds.
A pilot phase has already been successful between HDFC and Bharti Airtel in West Delhi. Chemist shops, general stores, residents, NGOs, anybody can register to become an authorized outlet.
ET spent a day with one such outlet, Gupta Medicals doubling as an authorized mobile banking outlet in West Delhi to find out how the system works.
A customer (Kamla) comes to the shop in immediate need of Rs 200. She comes to the outlet and asks for withdrawal from her mobile bank account. Sumit Gupta, the outlet owner SMSes from Kamla’s mobile phone the following code, “*543*123*(the outlet’s mobile number)*200*Kamla’s 10-digit Pin code#”. He sends the SMS to 54321. Instantly, Rs 200 get deposited into the outlet’s account withdrawn from Kamla’s HDFC account.
Mr Gupta hands over Rs 200 to Kamla with which she goes and buys fresh flowers for garlands. The transaction takes less than five minutes.
In order to confirm the transaction, HDFC bank sends an SMS to Kamla’s phone, “Balance in your HDFC account as of 3/7/2008 is INR 900.” Kamla’s account is a no frills account. To graduate to a savings bank account she will have to submit additional documents.
For remitting to India, one can just go to a Western Union (WU) outlet overseas and deposit forex. Instantly, a transaction ID will be generated on the receiver’s mobile which he can show to collect the amount at a WU outlet in India.
While the SMS is free, for a person-to-person transfer, a fee of Rs 20 is charged which is shared amongst Airtel, VISA, Mchek (platform provider) and others in the chain. Airtel CEO Manoj Kohli declined to disclose the revenue share arrangements.
With Mobile Money Transfer (MMT), the user can transfer funds to a mobile number, that is registered with mChek with a valid VISA card or to any 16digit VISA card number in the country. About Rs 20 is charged for a card-to-card transfer.
In it’s draft guidelines last month, the RBI has mandated to implement a minimum four digit mPIN for such transactions. However banks like HDFC have gone ahead and implemented a six digit mPIN.
ICICI’s Sachin Khandelwal terms mobile phone as more secure as in case of loss of a phone, there’s no way a person can use your cash. “In comparison, during loss of a card, there is always a risk of leakage,” he adds.
The SMS receipt can also be treated as a legal document under the new IT Act. Overall, while operators seem gung-ho on the service, it remains to be seen how much popularity mobile banking will find amongst India’s 270 million odd mobile subscribers and whether it will encourage 90% of the population which uses no bank to open a bank account.
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