With Interbank Mobile Payment Service (IMPS) in place, banks are now leveraging their existing corporate clientele to replace day-to-day cash dealings at the ground level with mobile transactions.
So far, 34 banks have registered with National Payments Corporation of India (NPCI) to enable mobile fund transfers between banks for their customers. While most of these banks have launched mobile banking services for their retail customers, some are busy laying the platform for institutional clients as well.
For instance, Citi launched 'Cash-To-Mobile Receivables Solution' and tied up with Coca-Cola India recently. So, instead of handing over the cash to the truck driver delivering goods, the retailer pays the beverage company through his mobile on receiving the order. Coca-Cola India receives credit and the driver gets a simultaneous alert. However, this is on a pilot basis.
Citi said other than in fast moving consumer goods, the mobile payments platform is also being used in the travel, e-commerce, retail and healthcare sectors.
According to experts, another foreign lender, Bank of America Merrill Lynch, is also setting up a mobile platform to facilitate faster collection and cash management for companies.
The biggest challenge in shifting business transactions to the mobile platform is that the client's dealers should also agree. "We are working with some of the companies to train their teams and help upgrade their existing customers to use IMPS," said Sudeep Yadav, MD & Head of Global Transaction Services at Citi.
Rajiv Sabharwal, executive director at ICICI Bank said there was a greater need for interoperability to make cheques and even cash redundant in the next three to five years. IMPS will be a convenient instrument for payments and collections even for businesses, he added. The private sector lender on Monday launched mobile banking services for its retail customers.
Public sector banks are also catching up. Union Bank of India aims to attract its clients from the cash management services to the mobile payment platform. Lalit Sinha, general manager-Alternate Delivery Channels & New Initiative Department at Union Bank of India said the platform will be ready before the end of this financial year.
"While mobile payments will help companies to centralise cash management, it will increase cash flows and generate fee income for banks," said Sinha.
To boost mobile banking in India, the Reserve Bank of India lifted the cap of Rs 50,000 on daily transactions in December. However, the banking regulator empowered banks to set limits based on their own risk perception and with approval of their respective boards.
According to data from NPCI, the volume of inter-bank mobile transactions increased to Rs 5 crore in January from Rs 4.2 crore a month ago. The number of transactions increased to 19,101 from 15,759 in the same period.
In all, banks have issued over 18 million Mobile Money Identifiers (seven digit codes given to customers).
