India’s Central Bank Authorizes Funds Transfers From ATMs To Mobile Phones

The Reserve Bank of India has authorized the transferring of funds from ATMs to mobile phones as part of an expansion of the country’s Interbank Mobile Payment Service, India’s central bank announced Nov. 9.

Operated by National Payments Corporation of India, the service previously enabled users to exchange funds with each other using only their mobile phones, a spokesperson for the corporation tells PaymentsSource. However, users of the service now may send funds to a beneficiary’s mobile phone from ATMs in a move designed to promote mobile transactions in the country, he adds, noting consumers also may exchange funds online.

To use the service, customers register with their banks, which will issue them a seven-digit mobile-money identifier and a mobile-banking PIN. To transfer funds, the sender first must download the mobile-money application and enter the PIN, the beneficiary’s mobile-phone number and mobile-money identifier, and the amount to be sent.

The beneficiary receives a text confirmation when the funds are sent, and he may deposit the funds into his account, withdraw them at an ATM, or approach a business correspondent to secure the cash. Business correspondents are bank-appointed officials who assist customers, mostly in rural areas, in performing basic banking functions on mobile terminals.

Use of the mobile-to-mobile funds-transfer service was slow when it started last fall. However, in October consumers conducted 12,511 mobile-to-mobile transactions valued at 38 million rupees (US$754,000 or 554,000 euros), according to the corporation.

The Reserve Bank of India permits banks to offer the mobile service to their customers, subject to a daily cap of 50,000 rupees (US$1,095 or 820 euros) per customer. Customers pay only mobile-operator charges; banks are still offering the service free to customers to promote the service, though they may decide to levy a charge at a later time.

Government-owned National Payments rolled out the mobile-payment service in November last year with seven member banks (see story). Some 28 member institutions now participate.

National Payments expanded the service in May to include payments, enabling consumers to user their phones to pay utility bills, make purchases at retail locations, pay government fees and make donations (see story).

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