Some things you wanted to know about internet mobile banking but did not know whom to ask   

November 24, 2010

How does IMPS work? What is the limit for funds transfer? Would a customer require a type of mobile phone to use this service? How secure is the service? Here are answers to some of these much-asked questions

On Monday, the National Payments Corporation of India (NPCI) launched the instant funds transfer service through mobile phones that allows a customer of a bank to send money to a customer of another bank. The service called Interbank Mobile Payment Service (IMPS) can be operated through low-end handsets to high-end mobiles. NPCI will provide the switching infrastructure. Here are some more answers to some questions you might have about the system.

What is IMPS?
IMPS or Interbank Mobile Payment Service is an instant interbank electronic fund transfer service through mobile phones. IMPS allows customers to use mobile instruments as a channel to access their banks accounts and remit funds from there.

How are interbank fund transfers made through mobile phones?
Various banks provide remittance facility through their mobile banking platform. The interbank remittance request initiated from a mobile is processed by the beneficiary bank as a National Electronic Fund Transfer (NEFT) transaction. The status of such a payment request is not known instantly because NEFT payments are processed in batches from 9am to 7pm. The NEFT transactions are charged by banks and the charges vary from bank to bank.

Does a customer need to have a bank account to use IMPS?
Yes, the customer must have a bank account with the bank which has enabled this facility. The customer must also enrol for the mobile banking service with the bank where the customer has an account.

Is the beneficiary customer also required to register for IMPS?
The beneficiary customer must have his/her mobile number registered with the bank where he/she maintains an account and where he/she intends to receive the money. He/she should also have a valid Mobile Money Identifier (MMID) provided by the bank. But there is no need to specifically enroll for the mobile banking service of the bank.

What is a Mobile Money Identifier?
The Mobile Money Identifier (MMID) is a seven-digit random number issued by the bank upon registration. The remitter (a customer who wants to send some money) and the beneficiary (a customer who wants to receive the money) should have the MMID to be able to do such interbank funds transfer by mobile phone.

What beneficiary details does the customer require to make an IMPS remittance?
The beneficiary details required are (1) The beneficiary’s mobile number, (2) The Mobile Money Identifier (MMID) of the beneficiary customer.

Can a customer link more than one account to the same mobile number?
Yes. The customer can link the same mobile number to more than one account, but only if the bank offers that feasibility.

If a customer has more than one account linked to his/her mobile number how does he/she select the account from which he/she intends to make the payment?
The bank will allocate a Mobile Money Identifier (MMID) for each account of the customer. The customer selects the account using the appropriate MMID allocated. The combination of the mobile number and the MMID helps as a mistake checking step for the remitter, mitigating the risk of wrong credit in case the remitter enters an erroneous mobile number.

What is the process flow for the Interbank Mobile Payment Service?
Step 1: Remitter sends instruction from his/her mobile, through the bank-provided application or SMS.
Step 2: The remitting bank validates the details of the remitter and debits his/her account. This transaction is sent by the remitting bank to the National Payments Corporation of India (NPCI).
Step 3: The transaction is passed by NPCI to the beneficiary bank. The beneficiary bank validates the details of the beneficiary customer, credits the account, sends a confirmation to NPCI about the status of the transaction, and sends an SMS to the beneficiary customer informing him/her about the credit.
Step 4: NPCI sends the transaction status to the remitting bank, which in turn informs the status of the transaction to the remitter.
Step 5: The remitting bank sends an SMS confirming the transaction to the remitting customer.

What is the limit on the value of transactions through IMPS?
The limit is defined by the Reserve Bank of India in mobile payment guidelines issued to banks. The customer can transact on IMPS subject to a daily cap of Rs50,000 per customer overall, for transactions for funds transfer through mobile. Transactions up to Rs1,000 can be facilitated by banks without end-to-end encryption.

Does a customer require a particular mobile handset model, or make, or features, to enable the service?
This would depend on the bank’s mobile banking interface requirements which varies from bank to bank. The details can be obtained from the respective banks.

What should a customer do in case he/she is not able to install the mobile banking application on a mobile handset?
In case the customer is not able to install the mobile banking application on the mobile handset, or the application is not functioning properly, the customer may need to update the software on the mobile handset and re-install the mobile banking application. If the problem is not resolved, the customer should contact the helpdesk of the bank whose mobile banking facility the customer intends to use.

Are there any charges to the customer for sending and receiving remittances by IMPS?
The charges for remittance through IMPS are decided by individual banks.

Can a customer deposit and/or withdraw money using IMPS?
Presently, customers cannot deposit and/or withdraw money by IMPS.

What if the IMPS registered mobile is lost or misplaced? Would anyone who gets possession of the mobile be able to make a remittance from the customer’s account?
At the time of mobile banking registration, the bank provides the customer with a USER ID and a Mobile Personal Identification Number (MPIN) to access the mobile banking facility. An IMPS remittance is not possible without these two inputs.

What happens if the remitter enters the wrong beneficiary mobile number for a remittance?
The beneficiary details required for making a remittance are the mobile number and Mobile Money Identifier. The transaction will be rejected if anyone of these two numbers is erroneous and the transaction will get reversed instantly.

Are there any timings to initiate and receive IMPS remittances?
IMPS transactions can be sent and received on any day and at any time. There are no timings or holiday restrictions.

What happens if the transaction is not completed? Would the customer get his/her money back and when?
In case for any reason, technical or business, the IMPS transaction is not completed, the reversal of the remitter’s funds will happen immediately. If such a transaction is subject to reconciliation wherein the status of transaction is not determined immediately, the reversal of funds will happen on the next working day.

How long does it take for the remittance to get credited into the beneficiary account number?
The funds should be credited to the beneficiary account in about 15-30 seconds.

Can the remitter transfer funds from his/her account to the beneficiary account in another bank?
Yes, the remitting customer can transfer funds to the beneficiary account in another bank.

How would the remitter know that his/her account is debited and funds have been credited to the beneficiary’s account?
The remitting bank sends a confirmation SMS to the remitting customer about the transaction initiated by him/her.

How would a beneficiary come to know of funds being credited to his/her bank account?
The beneficiary bank sends a confirmation SMS to the beneficiary customer informing him/her of the credit to the account.

Can a customer remit and/or receive remittance using a mobile number other than the one registered with the bank?
The customer can remit and/or receive funds using only the mobile number registered with the bank. In case he/she needs to remit/receive funds using another mobile number, he/she will have to approach the bank and complete the process of changing the registered mobile number for mobile banking.

When can the beneficiary use the funds received through IMPS?
The beneficiary can use the funds immediately on receipt of credit in the account. The funds received through IMPS are good funds and can be used immediately upon credit.

Are all banks offering IMPS?
The service has been launched with seven banks; they are State Bank of India, Bank of India, Union Bank of India, ICICI Bank, Yes Bank, Axis Bank and HDFC Bank. The list of banks offering IMPS will be updated as and when new banks join up. The list of banks offering the service is available at www.npci.org.in. — Moneylife Digital Team