A project report on Immediate Payment Service
for Kotak Mahindra Bank
In partial fulfillment of the requirements of Post Graduation Diploma in Business Management
conducted by
Rizvi Academy o Management
under the guidance of Pro! Imran Kazi
Submitted by "ayeem I! #akda$ala
PGDBM Batch: !"# $ !"%&
%&R'I(I%A'&
'his is to certify certify that( ) Mr! "ayeem I! #akda$ala) pursuing Post Graduation Diploma in Business Management from *i+,i Academy of Management bearing roll number P!!- and speciali+ing in .inance has successfully completed the project titled
*IMM&DIA'& PA+M&"' S&R,I%&-
under the guidance of Prof& Imran /a+i in partial fulfillment of the requirement of Post Graduate Diploma in Business Management by *i+,i Academy of Management for the academic year !"# $ !"%&
Pro! Imran Kazi
0Project Guide1
Pro! .mar (aroo/
Dr! Kalim Khan
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%&R'I(I%A'&
'his is to certify certify that( ) Mr! "ayeem I! #akda$ala) pursuing Post Graduation Diploma in Business Management from *i+,i Academy of Management bearing roll number P!!- and speciali+ing in .inance has successfully completed the project titled
*IMM&DIA'& PA+M&"' S&R,I%&-
under the guidance of Prof& Imran /a+i in partial fulfillment of the requirement of Post Graduate Diploma in Business Management by *i+,i Academy of Management for the academic year !"# $ !"%&
Pro! Imran Kazi
0Project Guide1
Pro! .mar (aroo/
Dr! Kalim Khan
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0Academic 2oordinator1
0Director1
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S'.D&"' D&%#ARA'I0"
I hereby declare that the dissertation submitted in partial fulfillment of requirement for the a3ard of PGDBM to *i+,i Academy of Management in my origin of 3or4 and has not been submitted for a3ard of any other degree of diploma fello3ship or for similar title or pri+es&
I further certify that I ha,e no objection and grant the rights to *i+,i Academy of Management or Mumbai 5ni,ersity to publish any chapter 6 projects if they deem fit in journals or maga+ines or ne3spapers 3ithout any permission&
Place: Mumbai
7ame: 7ayeem I& 8a4da3ala
2lass: PGDBM 0!"# $ !"%1
Signature:
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A%K"01#&DG&M&"'
A successful and satisfactory completion of any significant tas4 is the outcome of in,aluable aggregate contribution of differential personnel pulls in radial direction( e9plicitly or implicitly&
I ascribe my success in this ,enture to my guide Proessor Imran Kazi for his scholarly guidance( constant encouragement and untiring patience( I had the pri,ilege to accomplish this entire 3or4 as a reflection of his thoughts( ideas( concept and abo,e all his modest efforts&
I am grateful to all the staff members of Rizvi Academy o Management ( for gi,ing me the encouragement and all necessary facilities for carrying out this project 3or4&
Also I 3ould li4e to than4 our director Dr! Kalim Khan 3ho has pro,ided us 3ith the necessary infrastructure and guidance in the co urse of the project&
8ast but not the least( I am than4ful to all those 3ho indirectly e9tended their co operation& ;ithout their help this project 3ould not ha,e been in the current shape&
7ayeem I& 8a4da3ala
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IMMI2<
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&2&%.'I,& S.MMAR+ IMPS offers an instant( ?@( interban4 electronic fund transfer ser,ice through mobile phones& IMPS facilitate customers to use mobile instruments as a channel for accessing their ban4 accounts and put high interban4 fund transfers in a secured manner 3ith immediate confirmation features& 2urrently majority of interban4 mobile fund transfer transactions are channeli+ed through 7<.' mechanism& 5nder 7<.'( the transactions are processed and settled in batches( hence are not real time& Also( the transactions can be done only during the 3or4ing hours of the *'GS system& IMPS ser,ice helps you access your Ban4 Account and transfer funds instantly& 'he beneficiary account is credited immediately 3hen a .und 'ransfer request is made through your Mobile phone 6 Internet Ban4ing& 'his ser,ice is a,ailable ?9( throughout the year including Sundays and any ban4 holiday& IMPS PersontoPerson 0PP1 funds transfer requires the *emitter customer to ma4e funds transfer using Beneficiary Mobile 7umber and MMID& Both *emitter as 3ell as Beneficiary needs to register their mobile number 3ith their respecti,e ban4 account and get MMID( in order to send or recei,e funds using IMPS& 'here may be cases 3here *emitter is enabled on Mobile Ban4ing( but Beneficiary mobile number is not registered 3ith any ban4 account& In such cases( *emitter shall not be able to send money to the Beneficiary using Mobile 7umber MMID& Cence on the merit of the feedbac4 recei,ed from the ban4ing community as 3ell as to cater the abo,e mentioned need( the IMPS funds transfer has been made possible using Beneficiary account number and I.S code as 3ell( in addition to Beneficiary mobile number and MMID& IMPS fund transfer can either happen either by using mobile number and MMID or through I.S code and account number or through 7ational 5nified 5SSD Platform or through A'M 6 Internet Ban4ing channel& 'he *BI has no3 started promoting IMPS in order to ser,e their objecti,e of electrification of payments&
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I"D&2 Sr!"o!
'opic
3
Introduction to Payment Systems in India
Pg!"o ! 3
4 &" & &# &? &%
"e$ Initiatives 5y RBI on electronic payments and their 6ustiication Paperbased Payments
4 # E F
7 #&" #& #&#
Introduction to IMPS Bac4ground ,er,ie3 bjecti,es
8 "!
9 ?&" ?& ?&# ?&? ?&%
Parties Involved : 'ypes o transer IMPS .unds 'ransfer Person to Person 0PP1 IMPS Merchant Payments IMPS .unds 'ransfer through Account 7umber 6 I.S2 7ational 5nified 5SSD Platform 0755P1 IMPS .unds 'ransfer through A'M 6 Internet Ban4ing channel
33 "" " "E " !
; %&" %& %&# %&? %&% %&E %&
Process o IMPS 'ransaction 'hrough Mobile Ban4ing 'ransaction 'hrough SMS Ban4ing 'P generation through mobile ban4ing application 'P generation through SMS Ma4e Payment 5sing 'P .lo3 .or 2ustomer Initiated 'ransactions .lo3 .or Merchant Initiated 'ransactions
43 " # # ? % E
<
Beneits
4=
=
(uture o IMPS
4>
>
%onclusion
74
8
Bi5liography
79
8|Page
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'AB8< . 27'<7'S
%hp! "o!
'opic
Pg! "o!
; %&" %& %&# %&? %&% %&E %& %&F = &" & &# &?
Process o IMPS 'ransaction 'hrough Mobile Ban4ing 'ransaction 'hrough Mobile Ban4ing 'ransaction 'hrough SMS Ban4ing 'P generation through mobile ban4ing application 'P generation through SMS Ma4e Payment 5sing 'P .lo3 .or 2ustomer Initiated 'ransactions .lo3 .or Merchant Initiated 'ransactions (uture o IMPS 'rends in mobile ban4ing application users 'rends in mobile ban4ing transactions 'otal number of transactions o,er last t3el,e months 'otal amount transacted per month 2hapter "
43 "
# # ? % E 4> #! #"
I"'R0D.%'I0" '0 PA+M&"' S+S'&MS I" I"DIA
'he central ban4 of any country is usually the dri,ing force in the de,elopment of national payment systems& 'he *eser,e Ban4 of India as the central ban4 of India has been playing this de,elopmental role and has ta4en se,eral initiati,es for Safe( Secure( Sound(
10 | P a g e
PSS Act as 3ell as the Payment and Settlement System *egulations( !!F framed there under came into effect from August "( !!F& In terms of Section ? of the PSS Act( no person other than the *eser,e Ban4 of India 0*BI1 can commence or operate a payment system in India unless authori+ed by *BI& *eser,e Ban4 has since authori+ed payment system operators of prepaid payment instruments( card schemes( crossborder inbound money transfers( Automated 'eller Machine 0A'M1 net3or4s and centrali+ed clearing arrangements&
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2hapter
"&1 I"I'IA'I,&S B+ RBI 0" &#&%'R0"I% PA+M&"'S A"D '?&IR @.S'I(I%A'I0"
'he *eser,e Ban4 has ta4en many initiati,es to3ards introducing and upgrading safe and efficient modes of payment systems in the country to meet the requirements of the public at large& 'he dominant features of large geographic spread of the country and the ,ast net3or4 of branches of the Indian ban4ing system require the logistics of collection and deli,ery of paper instruments& 'hese aspects of the ban4ing structure in the country ha,e al3ays been 4ept in mind 3hile de,eloping the payment systems&
4!3
Paper5ased Payments
5se of paperbased instruments 0li4e cheques( drafts( and the li4e1 accounts for nearly E! of the ,olume of total noncash transactions in the country& In ,alue terms( the share is presently around ""& 'his share has been steadily decreasing o,er a period of time and electronic mode gained popularity due to the concerted efforts of *eser,e Ban4 of India to populari+e the electronic payment products in preference to cash and cheques& Since paper based payments occupy an important place in the country( *eser,e Ban4 had introduced Magnetic In4 2haracter *ecognition 0MI2*1 technology for speeding up and bringing in efficiency in processing of cheques& 8ater( a separate Cigh >alue 2learing 3as introduced for clearing cheques of ,alue *upees one la4h and abo,e& 'his clearing 3as a,ailable at select large centers in the country 0since discontinued1& *ecent de,elopments in paperbased instruments include launch of Speed 2learing 0for local clearance of outstation cheques dra3n on core ban4ing enabled branches of ban4s1( introduction of cheque truncation system 0to restrict physical mo,ement of cheques and enable use of images for payment processing1( framing 2'S!"! Standards 0for enhancing the security features on cheque forms1 and the li4e& ;hile the o,erall thrust is to reduce the use of paper for transactions( gi,en the fact that it 3ould ta4e some time to completely mo,e to the electronic mode( the intention is to reduce the mo,ement of paper $ both for local and outstation clearance of cheques&
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4!4
&lectronic Payments
'he initiati,es ta4en by *BI in the mideighties and earlynineties focused on technologybased solutions for the impro,ement of the payment and settlement system infrastructure( coupled 3ith the introduction of ne3 payment products by ta4ing ad,antage of the technological ad,ancements in ban4s& 'he continued increase in the ,olume of cheques added pressure on the e9isting setup( thus necessitating a cost effecti,e alternati,e system&
Electronic Clearing Service (ECS) Credit
'he Ban4 introduced the <2S 02redit1 scheme during the "--!s to handle bul4 and repetiti,e payment requirements 0li4e salary( interest( di,idend payments1 of corporates and other institutions& <2S 02redit1 facilitates customer accounts to be credited on the specified ,alue date and is presently a,ailable at all major cities in the country& During September !!F( the Ban4 launched a ne3 ser,ice 4no3n as 7ational
Regional ECS (RECS)
7e9t to 7<2S( *<2S has been launched during the year !!-&*<2S( a miniature of the 7<2S is confined to the ban4 branches 3ithin the jurisdiction of a *egional office of *BI& 5nder the system( the sponsor ban4 3ill upload the ,alidated data through the Secured ;eb Ser,er of *BI containing credit6debit instructions to the customers of 2BS enabled ban4 branches spread across the Hurisdiction of the *egional office of *BI& 'he *<2S centre 3ill process the data( arri,e at the settlement( generate destination ban4 3ise data6reports and ma4e a,ailable the data6reports through secured 3ebser,er to facilitate the destination ban4 branches to afford credit6debit to the accounts of beneficiaries by le,eraging the 2BS technology put in place b y the ban4& Presently *<2S is a,ailable in Ahmedabad( Bengaluru( 2hennai and /ol4ata
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Electronic Clearing Service (ECS) Debit
'he <2S 0Debit1 Scheme 3as introduced by *BI to pro,ide a faster method of effecting periodic and repetiti,e collections of utility companies& <2S 0Debit1 facilitates consumers 6 subscribers of utility companies to ma4e routine and repetiti,e payments by )mandating ban4 branches to debit their accounts and pass on the money to the companies& 'his tremendously minimi+es use of paper instruments apart from impro,ing process efficiency and customer satisfaction& 'here is no limit as to the minimum or ma9imum amount of payment& 'his is also a,ailable across major cities in the country&
Electronic Funds Transfer (EFT)
'his retail funds transfer system introduced in the late "--!s enabled an account holder of a ban4 to electronically transfer funds to another account holder 3ith any other participating ban4& A,ailable across "% major centers in the country( this system is no longer a,ailable for use by the general public( for 3hose benefit a featurerich and more efficient system is no3 in place( 3hich is the 7ational
National Electronic Funds Transfer (NEFT) System
In 7o,ember !!%( a more secure system 3as introduced for facilitating onetoone funds transfer requirements of indi,iduals 6 corporates& A,ailable across a longer time 3indo3( the 7<.' system pro,ides for batch settlements at hourly inter,als( thus enabling near realtime transfer of funds& 2ertain other unique features ,i+& accepting cash for originating transactions( initiating transfer requests 3ithout any minimum or ma9imum amount limitations( facilitating one3ay transfers to 7epal( recei,ing confirmation of the date 6 time of credit to the account of the beneficiaries( etc&( are a,ailable in the system&
Real Time Gross Settlement (RTGS) System
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*'GS is a funds transfer systems 3here transfer of money ta4es place from one ban4 to another on a Jreal timeJ and on JgrossJ basis& Settlement in Jreal timeJ means payment transaction is not subjected to any 3aiting period& JGross settlementJ means the transaction is settled on one to one basis 3ithout bunching or netting 3ith any other transaction& nce processed( payments are final and irre,ocable& 'his 3as introduced in !!? and settles all interban4 payments and customer transactions abo,e K la4h& Clearing Corporation of ndia !imited (CC!)
22I8 3as set up in April !!" by ban4s( financial institutions and primary dealers( to function as an industry ser,ice organi+ation for clearing and settlement of trades in money mar4et( go,ernment securities and foreign e9change mar4ets& 'he 2learing 2orporation plays the crucial role of a 2entral 2ounter Party 022P1 in the go,ernment securities( 5SD $I7* fore9 e9change 0both spot and for3ard segments1 and 2ollaterised Borro3ing and 8ending bligation 02B81 mar4ets& 22I8 plays the role of a central counterparty 3hereby( the contract bet3een buyer and seller gets replaced by t3o ne3 contracts bet3een 22I8 and each of the t3o parties& 'his process is 4no3n as )7o,ation& 'hrough no,ation( the counterparty credit ris4 bet3een the buyer and seller is eliminated 3ith 22I8 subsuming all counterparty and credit ris4s& In order to minimi+e these ris4s( that it e9poses itself to( 22I8 follo3s specific ris4 management practices 3hich are as per international best practices& In addition to the guaranteed settlement( 22I8 also pro,ides non guaranteed settlement ser,ices for 7ational .inancial S3itch 0Inter ban4 A'M transactions1 and for rupee deri,ati,es such as Interest *ate S3aps& 22I8 is also pro,iding a reporting platform and acts as a repository for ,er the 2ounter 0'21 products&
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4!7
0ther Payment Systems
"re#paid "ayment Systems
Prepaid instruments are payment instruments that facilitate purchase of goods and ser,ices against the ,alue stored on these instruments& 'he ,alue stored on such instruments represents the ,alue paid for by the holders by cash( by debit to a ban4 account( or by credit card& 'he prepaid payment instruments can be issued in the form of smart cards( magnetic stripe cards( internet accounts( internet 3allets( mobile accounts( mobile 3allets( paper ,ouchers( etc& Subsequent to the notification of the PSS Act( policy guidelines for issuance and operation of prepaid instruments in India 3ere issued in the public interest to regulate the issue of prepaid payment instruments in the country& 'he use of prepaid payment instruments for cross border transactions has not been permitted( e9cept for the payment instruments appro,ed under .oreign <9change Management Act("--- 0.
$obile %an&ing System
Mobile phones as a medium for pro,iding ban4ing ser,ices ha,e been attaining increased importance& *eser,e Ban4 brought out a set of operating guidelines on mobile ban4ing for ban4s in ctober !!F( according to 3hich only ban4s 3hich are licensed and super,ised in India and ha,e a physical presence in India are permitted to offer mobile ban4ing after obtaining necessary permission from *eser,e Ban4& 'he guidelines focus on systems for security and interban4 transfer arrangements through *eser,e Ban4Ls authori+ed systems& n the technology front the objecti,e is to enable the de,elopment of interoperable standards so as to facilitate funds transfer from one account to any other account in the same or any other ban4 on a real time basis irrespecti,e of the mobile net3or4 a customer has subscribed to&
'T$s "oint of Sale ("S) Terminals nline Transactions
Presently( there are o,er E"(!!! A'Ms in India& Sa,ings Ban4 customers can 3ithdra3 cash from any ban4 terminal up to % times in a month 3ithout being charged for the same& 'o address the customer ser,ice issues arising out of failed A'M transactions
16 | P a g e
3here the customerLs account gets debited 3ithout actual disbursal of cash( the *eser,e Ban4 has mandated recrediting of such failed transactions 3ithin " 3or4ing day and mandated compensation for delays beyond the stipulated period& .urthermore( a standardi+ed template has been prescribed for displaying at all A'M locations to facilitate lodging of complaints by customers& 'here are o,er fi,e la4h PS terminals in the country( 3hich enable customers to ma4e payments for purchases of goods and ser,ices by means of credit6debit cards& 'o facilitate customer con,enience the Ban4 has also permitted cash 3ithdra3al using debit cards issued by the ban4s at PS terminals& 'he PS for accepting card payments also include online payment gate3ays& 'his facility is used for enabling online payments for goods and ser,ices& 'he online payment are enabled through o3n payment gate3ays or third party ser,ice pro,iders called intermediaries& In payment transactions in,ol,ing intermediaries( these intermediaries act as the initial recipient of payments and distribute the payment to merchants& In such transactions( the customers are e9posed to the uncertainty of payment as most merchants treat the payments as final on receipt from the intermediaries& In this regard safeguard the interests of customers and to ensure that the payments made by them using * 0technically referred to as card not present 027P1 transactions1( *eser,e Ban4 mandated that all 27P transactions should be additionally authenticated based on information not a,ailable on the card and an online alert should be sent to the cardholders for such transactions&
4!9
"ational Payments %orporation o India
'he *eser,e Ban4 encouraged the setting up of 7ational Payments 2orporation of India 07P2I1 to act as an umbrella organi+ation for operating ,arious *etail Payment Systems 0*PS1 in India& 7P2I became functional in early !!-& 7P2I has ta4en o,er 7ational .inancial S3itch 07.S1 from Institute for De,elopment and *esearch in Ban4ing 'echnology 0ID*B'1& 7P2I is e9pected to bring greater efficiency by 3ay of uniformity and standardi+ation in retail payments and e9panding and e9tending the reach of both e9isting and inno,ati,e payment products for greater customer con,enience&
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4!;
0versight o Payment and Settlement Systems
,ersight of the payment and settlement systems is a central ban4 function 3hereby the objecti,es of safety and efficiency are promoted by monitoring e9isting and planned systems( assessing them against these objecti,es and( 3here necessary( inducing change& By o,erseeing payment and settlement systems( central ban4s help to maintain systemic stability and reduce systemic ris4( and to maintain public confidence in payment and settlement systems& 'he Payment and Settlement Systems Act( !! and the Payment and Settlement Systems *egulations( !!F framed there under( pro,ide the necessary statutory bac4ing to the *eser,e Ban4 of India for underta4ing the ,ersight function o,er the payment and settlement systems in the country&
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2hapter #
I"'R0D.%'I0" '0 IMPS
7!3
Background
2urrently majority of interban4 mobile fund transfer transactions are channeli+ed through 7<.' mechanism& 5nder 7<.'( the transactions are processed and settled in batches( hence are not real time& Also( the transactions can be done only during the 3or4ing hours of the *'GS system& In the abo,e conte9t( 7P2I has carried out a pilot on mobile payment system initially 3ith ? member ban4s ,i+& State Ban4 of India( Ban4 of India( 5nion Ban4 of India and I2I2I Ban4 in August !"!& =es Ban4( A9is Ban4 and CD.2 Ban4 ha,e joined this pilot in month of September( ctober and 7o,ember !"! respecti,ely& Immediate Payment Ser,ice 0IMPS1 public launch happened on nd 7o,ember !"! by Smt& Shyamala Gopinath( DG *BI at Mumbai and this service is no$ availa5le to the Indian pu5lic! IMPS offers an instant( ?@( interban4 electronic fund transfer ser,ice through mobile phones& IMPS facilitate customers to use mobile instruments as a channel for accessing their ban4 accounts and put high interban4 fund transfers in a secured manner 3ith immediate confirmation features& 'his facility is pro,ided by 7P2I through its e9isting 7.S s3itch& 'he eligi5le criteria or the Banks $ho can participate in IMPS is that the Bank should have approval rom RBI or Mo5ile Banking Service!
7!4
0vervie$
IMPS 0Immediate Payment Ser,ice1 allo3s customers to ma4e instant( ?( interban4 payments to indi,iduals( or merchants 6 enterprises ,ia mobile phone and other channels 0Internet or A'M1& 'he 4ey features of IMPS are as follo3s: •
Instant Interban4 fund transfer
•
2on,enient and timesa,ing
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•
Anytime( any3here ser,ice
•
Safe secure
•
Simple easy to use
•
?#E% a,ailability
•
Instant confirmation to sender and recei,er
7!7
056ectives •
'o enable ban4 customers to use mobile instruments as a channel for accessing their ban4s accounts and remit funds
•
Ma4ing payment simpler just 3ith the mobile number of the beneficiary
•
'o subser,e the goal of *eser,e Ban4 of India 0*BI1 in electronification of retail payments
•
'o facilitate mobile payment systems already introduced in India 3ith the *eser,e Ban4 of India Mobile Payment Guidelines !!F to be interoperable across ban4s and mobile operators in a safe and secured manner
•
'o build the foundation for a full range of mobile based Ban4ing ser,ices&
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2hapter ?
PAR'I&S I",0#,&D : '+P&S 0( 'RA"S(&R
'he participants or IMPS $ill 5e as ollo$s • • • •
*emitter 0Sender1 Beneficiary 0*ecei,er1 Ban4s 7ational .inancial S3itch $ 7P2I
(ollo$ing are the types o IMPS services •
IMPS .unds 'ransfer Person to Person 0PP1
•
IMPS .unds 'ransfer through Account 7umber 6 I.S2
•
IMPS Merchant Payments
•
7ational 5nified 5SSD Platform 0755P1
'his ser,ice is brought to you by 7ational Payments 2orporation of India 07P2I1 in collaboration 3ith Member Ban4s&
9!3
IMPS (unds 'ranser C Person to Person P4PE 9!3a
Getting Started
•
*egister mobile number 3ith respecti,e ban4 Generate MMID& MMID 0Mobile Money Identifier1 is digit number( to be
•
issued by the Ban4 to the customer upon registration Get MPI7& MPI7 is Mobile Ban4ing PI7 $ secret pass3ord $ to be used by
•
customer during transaction for authentication and security Do3nload mobile ban4ing application or use SMS 6 5SSD facility as pro,ided by
•
the Ban4 to ma4e payment
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9!35
Sending money
•
Initiate IMPS transaction using Ban4 mobile ban4ing application or SMS 6
•
5SSD facility pro,ided by Ban4 2ustomer needs to enter beneficiary mobile number( beneficiary MMID( Amount and MPI7 for initiating transaction& 2ustomer shall recei,e confirmation SMS for the transaction initiated
9!45 • • • •
9!4
Receiving money
*egister your mobile number 3ith your account in the Ban4 Get MMID from the Ban4 Share your mobile number and MMID 3ith sender As4 the sender to send money
IMPS Merchant Payments
9!4a
0vervie$
IMPS Merchant Payments 0PM $ Persontomerchant1 ser,ice allo3s customers to ma4e instant( ?( interban4 payments to merchants or enterprises ,ia mobile phone& IMPS enables mobile ban4ing users a facility to ma4e payment to merchants and enterprises( through ,arious access channels such as Internet( Mobile Phone( I>*( SMS( 5SSD& 2ustomer can ma4e payment to any 4ind of merchant using IMPS merchant payments ser,ice: "& Mobile topup 6 D'C topup & Insurance premium payment
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#& nline shopping ?& ,erthecounter payments %& .ees payments to schools 6 colleges 6 uni,ersities E& 5tility Bill payments & 'ra,el 'ic4eting
'he 4ey features of IMPS merchant payments ser,ice are as follo3s: "& Instant Interban4 fund transfer & Merchant needs to get onboard IMPS net3or4 3ith one Ban4& 2ustomer of any Ban4 in the IMPS merchant net3or4 can ma4e payment to merchant through IMPS #& 2on,enient and timesa,ing ?& Anytime( any3here ser,ice %& Safe secure E& ?#E% a,ailability & Instant confirmation to sender and recei,er
9!45
Getting started
2ustomer needs to be a mobile ban4ing user of their respecti,e Ban4& 2ustomer needs to do the follo3ing in order to get started: "& *egister mobile number 3ith the account in the respecti,e Ban4 & Get MMID& MMID stands for Mobile Money Identifier and is digit number that is pro,ided by Ban4 to customer& 'his number is used to identify customer Ban4 and is lin4ed to the account number& 'he combination of mobile number and MMID is unique for the particular account( and customer can lin4 same mobile number 3ith multiple accounts in the same Ban4( and get separate MMID for each account
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#& Get MPI7& MPI7 is Mobile PI7( a secret pass3ord that is pro,ided by Ban4 to customer& 2ustomer needs to authenticate transaction using MPI7 ?& Do3nload mobile ban4ing application or use SMS 6 5SSD facility pro,ided by the Ban4& In order to perform IMPS transactions( customer needs to do3nload mobile ban4ing application or use SMS 6 5SSD facility pro,ided by the Ban4 %& Perform transaction using mobile ban4ing application or SMS 6 5SSD facility
9!4c
1orking o IMPS
'here are t3o 3ays in 3hich IMPS merchant payment 0PM $ Personto merchant1 transaction can be performed: "& 2ustomer initiated transaction 0PM P5SC1 & Merchant initiated transaction 0PM P5881
Customer initiated transaction (P2M PUSH) In the customer initiated transaction 0PM P5SC1( customer initiates transaction through the Ban4s mobile ban4ing application or SMS facility pro,ided by the Ban4& 'he Ban4 offers )IMPS merchant payments form in the mobile ban4ing application 0this form is a,ailable in )IMPS menu on the main menu of mobile application1 or SMS synta9 for performing PM P5SC transaction& 2ustomer needs to enter the follo3ing parameters: "& Merchant mobile number & Merchant MMID #& Amount ?& MPI7 %& Payment *eference Payment *eference is an optional %! characters field pro,ided& 'his field 3ill be used to enter the unique reference for the payment( and identifies the transaction to the merchant& 'he merchant decides 3hat customer 3ill enter in this field& .or e&g& for
24 | P a g e
insurance premium payment( customer may need to enter policy number in the payment reference fieldN for electricity bill payment( it may be consumer number& 'he synta9 and information to be input in the payment reference field 3ill be decided by merchant( and communication of the same 3ill be merchant o3nership&
'he SMS synta9 for ma4ing PM P5SC transaction through SMS is as follo3s: MIMPS OMerchant mobile numberOMerchant MMIDOAmountOM PI7OPayment *eference to Ban4s long code or short code number& n initiating transaction as abo,e( customer recei,es the confirmation SMS 3ith status of transaction shortly& .or IMPS PM P5SC transaction initiated through SMS( transaction limit is *s %(!!!6 per day 0for most ban4s1( and for transactions initiated through mobile ban4ing application( transaction limit is as decided by the Ban4 0*s %!(!!!6 for most ban4s1
Merchant initiated transaction (P2M PULL) In Merchant Initiated transaction 0PM P5881( the transaction is initiated through Merchant application 0such as Merchant 3ebsite( ;AP site( I>*( mobile application1& 'he typical steps to follo3 for ma4ing transaction through PM P588 are as follo3s: "& >isit merchant application such as 3eb site( mobile application( or ;AP site & Select product 6 ser,ice for 3hich payment is to be made #& In the payment options a,ailable( choose IMPS ?&
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Pass3ord( as generated by customer1& 'P needs to be generated by customer for ea ch transaction& 'P can be generated by customer by using mobile ban4ing application or SMS facility as pro,ided by the Ban4& 'he Ban4 offers )Generate 'P form in the mobile ban4ing app lication 0this form is a,ailable in )IMPS menu 3ithin main menu of mobile ban4ing application1 or SMS synta9 for )Generate 'P transaction& 2ustomer needs the follo3ing parameters
"& MPI7
'he SMS synta9 for )Generate 'P through SMS is as follo3s: 'P OMPI7 to Ban4s long code or short co de number& n initiating transaction as abo,e( customer recei,es the confirmation SMS 3ith status of transaction shortly&
'he 'P generated as abo,e has follo3ing characteristics: "& 'P is ,alid for " hour from time of generation & If 'P is generated through SMS( the transaction limit is *s %(!!!6 and if 'P is generated through mobile ban4ing application( the transaction limit is as decided by the Ban4 0*s %!(!!!6 for most ban4s1 #& 'P is ,alid only for one transaction $ Successful or .ailure ?& nly one 'P 0latest generated 'P1 is ,alid at a time
9!7
IMPS (unds 'ranser through Account "um5er : I(S%
9!7a
0vervie$
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2urrently( IMPS PersontoPerson funds transfer requires the *emitter customer to ma4e funds transfer using Beneficiary Mobile 7umber and MMID& Both *emitter as 3ell as Beneficiary need to register their mobile number 3ith their respecti,e Ban4 and get MMID( in order to send 6 recei,e funds using IMPS& 'here may be cases 3here *emitter is enabled on Mobile Ban4ing( but Beneficiary mobile number is not registered 3ith the Ban4 account& In such cases( *emitter shall not be able to send money to the Beneficiary& As per the feedbac4 recei,ed from Ban4ing community( the IMPS funds transfer shall no3 be possible using Beneficiary account number and I.S code as 3ell( in addition to Beneficiary mobile number and MMID&
9!75
1orking o IMPS
In the IMPS menu( a transaction type )IMPS funds transfer $ 'o account number 3ill be a,ailable& .ollo3ing fields need to be entered: a& Beneficiary account number b& Beneficiary I.S2 code c& Beneficiary account type 0optional field1 d& Amount e& MPI7 f&
*emar4s
'he SMS synta9 for ma4ing the transaction through SMS is as follo3s: OIMPS OBeneficiary account number OBene I.S2 code Oaccount type OAmount OSMS PI76MPI7 O*emar4s to Ban4s long code or short code number&
9!9
"ational .niied .SSD Platorm "..PE
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9!9a
0vervie$
7ational 5nified 5SSD Platform 0755P1 offered on a short code --Q is a ser,ice 3hich 3ould ta4e ban4ing ser,ices to e,ery common man in this country& 'he ser,ice 3ould allo3 e,ery ban4ing customer to access ban4ing ser,ices 3ith a single number across all ban4s $ irrespecti,e of the telecom ser,ice pro,ider( mobile handset ma4e or the region& A common platform for all ban4s instead of each ban4 ha,ing to de,elop a platform is a strategic mo,e by 7P2I to help ban4s and let them focus on customers to enable this ser,ice 3hile 7P2I manages the technology behind the platform&
9!95
Beneits o "..P
•
--Q one number for e,ery Indian to access ban4ing ser,ices& -! of phones used in the country are GSM phones and this ser,ice
•
3or4s on all GSM phones irrespecti,e of handset ma4e( cost( operating system or e,en the telecom ser,ice pro,ider ;or4s on basic ,oice connecti,ity $ unli4e an application GP*S
•
• •
connecti,ity is not required 'he customer need not do3nload any application on the phone Ruestion and ans3er dri,en interaction $ simple for e,eryone to understand
9!9c
1ays to get started
2ustomer requires to mobile ban4ing registered 3ith his6her ban4 by completing belo3 process: "& *egister mobile number 3ith respecti,e ban4& & Generate MMID& MMID 0Mobile Money Identifier1 is digit number( to be issued by the Ban4 to the customer upon registration&
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#& Get MPI7& MPI7 is Mobile Ban4ing PI7 $ secret pass3ord $ to be used by customer during transaction for authentication and security&
9!9d
'he $orking o IMPS
"& 2ustomer dials F88 from his mobile phone& & 2ustomer recei,es 3elcome message as *1elcome to "ational .niied .SSD Platorm or Mo5ile Banking! Please enter your = digit MMID!#&
2ustomer enters digit MMID recei,ed from the ban4 and sends the request&
?& 'he ban4 mobile ban4ing menu is displayed on the screen& %& 2ustomer selects the transaction from the menu and enters the details as requested in the 755P session to complete the transaction& E& 2ustomer enters the MPI7 and confirms the transaction& & 'ransaction is sent to the Issuer Ban4 for processing from 755P Platform& F& Issuer ban4 completes the transaction and confirms the result on the mobile of the customer in the session& -& 2ustomer gets SMS in case of IMPS transaction 3ith the details of the transaction&
Steps for transaction "& Balance
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%& Generate 'P E& *equest 2hec4 Boo4
9!;
IMPS (unds 'ranser through A'M : Internet Banking channel
IMPS .unds 'ransfer can be done through A'M and Internet Ban4ing channels as 3ell( in addition to Mobile phones& 'he authentication 3ill be done for the *emitting customers as 02ard A'M Pin1 or 05ser Id Internet Ban4ing Pass3ord 6 'ransaction pass3ord1 3ith appropriate e9isting t3ofactor authentication method& Since the transaction 3ould be initiated on A'M 6 Internet platform( the transaction limits of indi,idual Ban4s for A'M 6 Internet channel shall apply& IMPS system is used for beneficiary identification and realtime settlement of transactions&
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2hapter %
PR0%&SS 0( IMPS
;!3
'ransaction through mo5ile 5anking
(igure ;!3 (source : NPCI)
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(igure ;!4 (source : NPCI)
;!4
'ransaction through SMS
(igure ;!7 (source : NPCI)
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;!7
0'P generation through mo5ile
(igure ;!9 (source : NPCI)
;!9
0'P generation through SMS
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(igure ;!; (source : NPCI)
;!;
Make payment using 0'P
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(igure ;!< (source : NPCI)
;!<
(lo$ o IMPS %ustomer InitiatedE
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(igure ;!= (source : NPCI)
;!=
(lo$ o IMPS Merchant InitiatedE
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(igure ;!> (source : NPCI)
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2hapter E
B&"&(I'S 0( IMPS
•
Instant money transfer
•
Internet connection not required
•
Money can be transferred irrespecti,e of holidays( timings&
•
7o disclosure of ban4 account details
•
'ime consumption is less 3hen compared to 7<.'( *'GS
•
Instant Interban4 fund transfer
•
2on,enient and timesa,ing
•
Anytime( any3here ser,ice
•
Safe secure
•
Simple easy to use
•
?#E% a,ailability
•
Instant confirmation to sender and recei,er
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2hapter
(.'.R& 0( IMPS
IMPS is all about digitali+ation& In the ne3 era( 3here e,erything is getting digitali+ed( it is a great mo,e by 7P2I in collaboration 3ith *BI to introduce such 4ind of a ser,ice& India is the secondlargest mobile phone user 3ith o,er -!! million users in the 3orld& It accounted for o,er "! of the 3orlds online population in !""& Also( 3ith more and more people accessing the ;eb through mobile phones( the Internet user base in the country is projected to touch ?# million by August !"?( a yearonyear gro3th of F per cent& According to the Internet And Mobile Association of India 0IAMAI1( the Internet user base in the country stood at "-! million at the end of Hune( !"#& .or the 3hole year !"#( the Internet user base gre3 ? per cent to "# million( from "%! million in !"& f the total user base( mobile Internet users accounted for "#! million in !"#( a gro3th of about - per cent from EF million in !"&IAMAI e9pects the number of mobile Internet users to touch "F% million by Hune !"?( accounting for about E per cent of the Internet user base in the country& Also( 3ith people no3adays being able to do almost all of their daily routine 3or4 through mobile( this 3ill just be an added ad,antage& Introduction of payment through mobile and internet( 3ill enable users to complete transactions from 3here,er they 3ish to and at 3hate,er time they intend to do it& 7either do they ha,e to stand in the long queues of ban4s branches nor do they ha,e to physically be present at branches and instead can complete their other 3or4 on the mo,e& Also( it is quite e,ident that *BI 3ants to ma4e this happen so that there are no branches physically present any3here& 'he success of IMPS 3ill ha,e *BI achie,e their goal of electronification of retail payments&
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Belo3 chart 0retrie,ed from *BI1 sho3s the trend of mobile ban4ing application users in India o,er the years&
(igure =!3 (source : RBI)
IndiaLs central ban4 says mobile ban4ing adoption in the country has been encouraging( but belo3 e9pectation( due to 4ey factors such as de,ice incompatibility and lac4 of industry collaboration& In its halfyearly financial stability report released this 3ee4( the *eser,e Ban4 of India 0*BI1 said mobile could potentially be a 4ey catalyst for e9panding ban4ing ser,ices across the country( including rural India& ,er %! percent of the population ha,e no access to financial ser,ices& 'rends in Mobile Ban4ing 'ransactions
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(igure =!3 (source : RBI)
Co3e,er the flipside is that some e9perts are of the opinion that due to technological limitations in India( mobile ban4ing 3ould not be safe mo,e& <,en as IndiaLs ban4ing regulator is promoting internet and mobile ban4ing in a big 3ay( cyber security e9perts question *eser,e Ban4 of IndiaLs 0*BI1 intention in doing so& Most Indian ban4s( they say( are pro,iding internet ban4ing ser,ices 3ithout gi,ing much thought to cyber security( also blatantly disregarding *BILs guidelines on the issue& According to e9perts( consumers should be especially 3ary of mobile ban4ing 3hich can be more dangerous due to ob,ious lac4 of security systems for mobile phones& An *'I query filed by citybased 7G 2yber A3areness rgani+ation 02A1 recently e,en re,eals that none of the ban4s in the country has drafted information security guidelines 3hich are mandatory as per *BILs guideline on electronic ban4ing& ther e9perts say that no ban4 in the country has e,en applied for cyber crime insurance&
Also( to add to the delight of *BI( ,alue of IMPS transactions in India has seen a jump of nearly @( signaling a sharp rise in mobile fund transfers in the country& More than la4h transactions 3orth o,er *s ?!! cr 3ere carried out using this mechanism in Huly
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!"# alone& 'his 3hen compared to the a total transactions amount of *s "F&% cr from &F! la4h transactions in August !"( sho3s a huge increase in IMPS usage&
(igure =!7 (dated: 30th u!" 20#3) (source : ne$t%i!&hat'com)
'he analytics o,er the year also pro,ides another interesting insight( that of the gro3th in transactions amount o,er a years time& Bac4 in August !" the a,erage transaction amount 3as at *s E?%&( this had nearly increased -@ in a years time to touch *s& %F"F&% by Huly !"#&
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(igure =!9 (dated: 30th u!" 20#3) (source : ne$t%i!&hat'com)
'herefore( although some factors promise a bright future for IMPS( there are some( as pointed out abo,e( 3hich promise many hiccups in its progressi,e path& But all in all( although it 3ill ta4e time but certainly( IMPS 3ill be accepted 3hole heartedly by the Indians& 'he need of the hour for a bright future of IMPS is its aggressi,e promotion by the *BI and go,ernment&
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2hapter F
%0"%#.SI0"
It is often said that 'ime is Money& 'he *BI has sho3n its belief in this by launching the ne3 feature Immediate Payment Ser,ice 3hich focuses on transferring payments from one person to the other 3hich is almost as real as indulging in a face to face transaction& ;hene,er money is transferred( more or less( it is al3ays ad,isable that money reaches the other person as soon as possible& In just a matter of fe3 seconds( money is transferred from one person to the other by just a fe3 clic4s on your mobile phone& IMPS does just that and therefore it is indeed a ,ery inno,ati,e step ta4en by *BI& It is sure to change the entire ban4ing mannerisms in India and ho3e,er it is sure to face many difficulties in its progressi,e path& 'he main factor being TtrustU on mobile ban4ing applications amongst Indians& Co3e,er( it 3ould be unfair to not ta4e into consideration the fact that inspite of all difficulties& IMPS 3ill be a turning point in the ban4ing s ystem of India& =es( the trend of number of mobile ban4ing application users in India has been continuously sho3ing an up3ard rise 3hich is a positi,e sign for the *BI yet( it cannot be ignored that there are fe3 hiccups in the progressi,e path of *BI& 'he only positi,e 3hich fa,ors this product introduced by *BI is the increasing number of mobile application users in India and also the incremental research and use of technology& But it 3ould be a fair argument that though number of mobile application users using mobile ban4ing are increasing( but this gro3th is ,ery limited indeed and 3ould certainly be stagnant at some point as it 3ould ta4e many years or maybe it is possible that the rural people 3ould ne,er be 3illing to use mobile ban4ing for fund transfer because of lac4 of technical 4no3ledge 3hich ma4es them belie,e that such payment option is ris4y& 'he central ban4 3as also found quoting in early !"? that although increase in mobile ban4ing application users is encouraging but it is still belo3 e9pectation& Moreo,er( to point out some reasons 3hich are not in fa,or of IMPS are firstly( on the side of some Indian ban4s( there is ignorance about promotion of IMPS& 'hrough personal research( 3hen ,isited one of the ban4s of India 0not to be named1 3hich is listed on *BI 3ebsite as one of the ban4s ha,ing registered for IMPS( the employee in that particular ban4s branch did not 4no3 3hat IMPS is 3hen queried about the procedure to register for it& Also( there is no effort on the part of *BI or the go,ernment to promote IMPS through any medium of ad,ertising& Also( India is the most di,ersified country 3here all sections of society reside& 'herefore( there is a section 3hich is ,ery tech sa,,y 3hile there are others 3ho are not& 'here are fe3 3ho although 4no3 about
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IMPS and other modes of payment but prefer to be ignorant about it because 3here money is concerned( many Indians e,en today do not trust completely on technology& 'here is also the older section of society 3hich does not 4no3 anything about mobile e9cept for the basic feature of ho3 to recei,e and ma4e calls& 'herefore( unli4e other foreign countries it is impossible for a country li4e India to ma4e all of its ban4ing population use a technology dri,en payment system li4e the IMPS& Co3e,er( I 3ould li4e to contradict my o3n point by saying that IMPS 3ill surely be a success and almost all those 3ho ha,e accounts in ban4s and 3ho do transactions on daily basis but there 3ill be a slo3 and steady gro3th of trust in IMPS and people 3ill 3elcome it 3ith open arms just li4e they ha,e embraced A'Ms& IMPS 3ill surely be used by almost all of the urban population and maybe by some in rural areas in India gradually and and this 3ill also help ban4s to operate on minimum branches and 3ith handful employees and thus reduce cost& By the introduction of IMPS( the day is not far 3hen ,isiting the branch of a ban4 3ill be a history 0for urban areas1& 1elcome the change that India needsH $elcome IMPS!
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