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Showing posts with label paperless transactions. Show all posts
Showing posts with label paperless transactions. Show all posts

Friday, 4 December 2020

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Monday, 10 July 2017

08:06

Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Banking Transactions -Reserve Bank Of India

Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Banking Transactions -Reserve Bank Of India
Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Banking Transactions
RBI/2017-18/15
DBR.No.Leg.BC.78/09.07.005/2017-18
July 6, 2017
All Scheduled Commercial Banks (including RRBs)
All Small Finance Banks and Payments Banks
Dear Sir/ Madam,
Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Banking Transactions
Please refer to our circular DBOD.Leg.BC.86/09.07.007/2001-02 dated April 8, 2002 regarding reversal of erroneous debits arising from fraudulent or other transactions.
2. With the increased thrust on financial inclusion and customer protection and considering the recent surge in customer grievances relating to unauthorised transactions resulting in debits to their accounts/ cards, the criteria for determining the customer liability in these circumstances have been reviewed. The revised directions in this regard are set out below.
Strengthening of systems and procedures
3. Broadly, the electronic banking transactions can be divided into two categories:
i. Remote/ online payment transactions (transactions that do not require physical payment instruments to be presented at the point of transactions e.g. internet banking, mobile banking, card not present (CNP) transactions), Pre-paid Payment Instruments (PPI), and
ii.Face-to-face/ proximity payment transactions (transactions which require the physical payment instrument such as a card or mobile phone to be present at the point of transaction e.g. ATM, POS, etc.)
4. The systems and procedures in banks must be designed to make customers feel safe about carrying out electronic banking transactions. To achieve this, banks must put in place:
i. appropriate systems and procedures to ensure safety and security of electronic banking transactions carried out by customers;
ii. robust and dynamic fraud detection and prevention mechanism;
iii. mechanism to assess the risks (for example, gaps in the bank’s existing systems) resulting from unauthorised transactions and measure the liabilities arising out of such events;
iv.appropriate measures to mitigate the risks and protect themselves against the liabilities arising therefrom; and
v.a system of continually and repeatedly advising customers on how to protect themselves from electronic banking and payments related fraud.
Reporting of unauthorised transactions by customers to banks
5. Banks must ask their customers to mandatorily register for SMS alerts and wherever available register for e-mail alerts, for electronic banking transactions. The SMS alerts shall mandatorily be sent to the customers, while email alerts may be sent, wherever registered. The customers must be advised to notify their bank of any unauthorised electronic banking transaction at the earliest after the occurrence of such transaction, and informed that the longer the time taken to notify the bank, the higher will be the risk of loss to the bank/ customer. To facilitate this, banks must provide customers with 24x7 access through multiple channels (at a minimum, via website, phone banking, SMS, e-mail, IVR, a dedicated toll-free helpline, reporting to home branch, etc.) for reporting unauthorised transactions that have taken place and/ or loss or theft of payment instrument such as card, etc. Banks shall also enable customers to instantly respond by "Reply" to the SMS and e-mail alerts and the customers should not be required to search for a web page or an e-mail address to notify the objection, if any. Further, a direct link for lodging the complaints, with specific option to report unauthorised electronic transactions shall be provided by banks on home page of their website. The loss/ fraud reporting system shall also ensure that immediate response (including auto response) is sent to the customers acknowledging the complaint along with the registered complaint number. The communication systems used by banks to send alerts and receive their responses thereto must record the time and date of delivery of the message and receipt of customer’s response, if any, to them. This shall be important in determining the extent of a customer’s liability. The banks may not offer facility of electronic transactions, other than ATM cash withdrawals, to customers who do not provide mobile numbers to the bank. On receipt of report of an unauthorised transaction from the customer, banks must take immediate steps to prevent further unauthorised transactions in the account.
Limited Liability of a Customer
(a) Zero Liability of a Customer
6. A customer’s entitlement to zero liability shall arise where the unauthorised transaction occurs in the following events:
i.  Contributory fraud/ negligence/ deficiency on the part of the bank (irrespective of whether or not the transaction is reported by the customer).
ii. Third party breach where the deficiency lies neither with the bank nor with the customer but lies elsewhere in the system, and the customer notifies the bank within three working days of receiving the communication from the bank regarding the unauthorised transaction.
(b) Limited Liability of a Customer
7. A customer shall be liable for the loss occurring due to unauthorised transactions in the following cases:
i.In cases where the loss is due to negligence by a customer, such as where he has shared the payment credentials, the customer will bear the entire loss until he reports the unauthorised transaction to the bank. Any loss occurring after the reporting of the unauthorised transaction shall be borne by the bank.
ii.In cases where the responsibility for the unauthorised electronic banking transaction lies neither with the bank nor with the customer, but lies elsewhere in the system and when there is a delay (of four to seven working days after receiving the communication from the bank) on the part of the customer in notifying the bank of such a transaction, the per transaction liability of the customer shall be limited to the transaction value or the amount mentioned in Table 1, whichever is lower.
Table 1
Maximum Liability of a Customer under paragraph 7 (ii)
Type of Account
Maximum liability
(₹)
• BSBD Accounts
5,000
• All other SB accounts
• Pre-paid Payment Instruments and Gift Cards
• Current/ Cash Credit/ Overdraft Accounts of MSMEs
• Current Accounts/ Cash Credit/ Overdraft Accounts of Individuals with annual average balance (during 365 days preceding the incidence of fraud)/ limit up to Rs.25 lakh
• Credit cards with limit up to Rs.5 lakh
10,000
• All other Current/ Cash Credit/ Overdraft Accounts
• Credit cards with limit above Rs.5 lakh
25,000
Further, if the delay in reporting is beyond seven working days, the customer liability shall be determined as per the bank’s Board approved policy. Banks shall provide the details of their policy in regard to customers’ liability formulated in pursuance of these directions at the time of opening the accounts. Banks shall also display their approved policy in public domain for wider dissemination. The existing customers must also be individually informed about the bank’s policy.
8. Overall liability of the customer in third party breaches, as detailed in paragraph 6 (ii) and paragraph 7 (ii) above, where the deficiency lies neither with the bank nor with the customer but lies elsewhere in the system, is summarised in the Table 2:
Table 2
Summary of Customer’s Liability
Time taken to report the fraudulent transaction from the date of receiving the communication
Customer’s liability (₹)
Within 3 working days
Zero liability
Within 4 to 7 working days
The transaction value or the amount mentioned in Table 1, whichever is lower
Beyond 7 working days
As per bank’s Board approved policy
The number of working days mentioned in Table 2 shall be counted as per the working schedule of the home branch of the customer excluding the date of receiving the communication.
Reversal Timeline for Zero Liability/ Limited Liability of customer
9. On being notified by the customer, the bank shall credit (shadow reversal) the amount involved in the unauthorised electronic transaction to the customer’s account within 10 working days from the date of such notification by the customer (without waiting for settlement of insurance claim, if any). Banks may also at their discretion decide to waive off any customer liability in case of unauthorised electronic banking transactions even in cases of customer negligence. The credit shall be value dated to be as of the date of the unauthorised transaction.
10. Further, banks shall ensure that:
i. a complaint is resolved and liability of the customer, if any, established within such time, as may be specified in the bank’s Board approved policy, but not exceeding 90 days from the date of receipt of the complaint, and the customer is compensated as per provisions of paragraphs 6 to 9 above;
ii. where it is unable to resolve the complaint or determine the customer liability, if any, within 90 days, the compensation as prescribed in paragraphs 6 to 9 is paid to the customer; and
iii.        in case of debit card/ bank account, the customer does not suffer loss of interest, and in case of credit card, the customer does not bear any additional burden of interest.
Board Approved Policy for Customer Protection
11.Taking into account the risks arising out of unauthorised debits to customer accounts owing to customer negligence/ bank negligence/ banking system frauds/ third party breaches, banks need to clearly define the rights and obligations of customers in case of unauthorised transactions in specified scenarios. Banks shall formulate/ revise their customer relations policy, with approval of their Boards, to cover aspects of customer protection, including the mechanism of creating customer awareness on the risks and responsibilities involved in electronic banking transactions and customer liability in such cases of unauthorised electronic banking transactions. The policy must be transparent, non-discriminatory and should stipulate the mechanism of compensating the customers for the unauthorised electronic banking transactions and also prescribe the timelines for effecting such compensation keeping in view the instructions contained in paragraph 10 above. The policy shall be displayed on the bank’s website along with the details of grievance handling/ escalation procedure. The instructions contained in this circular shall be incorporated in the policy.
Burden of Proof
12. The burden of proving customer liability in case of unauthorised electronic banking transactions shall lie on the bank.
Reporting and Monitoring Requirements
13. The banks shall put in place a suitable mechanism and structure for the reporting of the customer liability cases to the Board or one of its Committees. The reporting shall, inter alia, include volume/ number of cases and the aggregate value involved and distribution across various categories of cases viz., card present transactions, card not present transactions, internet banking, mobile banking, ATM transactions, etc. The Standing Committee on Customer Service in each bank shall periodically review the unauthorised electronic banking transactions reported by customers or otherwise, as also the action taken thereon, the functioning of the grievance redress mechanism and take appropriate measures to improve the systems and procedures. All such transactions shall be reviewed by the bank’s internal auditors.
14. The instructions contained in this circular supersede some of the instructions contained in our Master Circular DBR.No.FSD.BC.18/24.01.009/2015-16 dated July 1, 2015 on Credit Card, Debit Card and Rupee Denominated Co-branded Pre-paid Card Operations of Banks and Credit card issuing NBFCs as detailed in the Annex.
Yours faithfully,
(Prakash Baliarsingh)
Chief General Manager

Annex
Instructions in our Master Circular on Credit Card, Debit Card and Rupee Denominated Co-branded Pre-paid Card Operations of Banks and Credit card issuing NBFCs (DBR.No.FSD.BC.18/24.01.009/2015-16 dated July 1, 2015) which stand revised in respect of Scheduled Commercial Banks
Sr. No.
Existing Instructions
Revised instructions in this circular (Para No.)

Para No.
Instructions

1
I.14.1
Banks/ NBFCs should set up internal control systems to combat frauds and actively participate in fraud prevention committees/ task forces which formulate laws to prevent frauds and take proactive fraud control and enforcement measures.
4
2
II.7.(viii)(c)
7. Terms and conditions for issue of cards to customers:
(viii) (c) The terms shall put the cardholder under an obligation to notify the bank immediately after becoming aware:
- of the loss or theft or copying of the card or the means which enable it to be used;
- of the recording on the cardholder’s account of any unauthorised transaction; and
- of any error or other irregularity in the maintaining of that account by the bank.
5
3
II.7.(viii)(d)
(viii) (d): The terms shall specify a contact point to which such notification can be made. Such notification can be made at any time of the day or night.
5
4
II.7.(x)
The terms shall specify that the bank shall be responsible for direct losses incurred by a cardholder due to a system malfunction directly within the bank’s control. However, the bank shall not be held liable for any loss caused by a technical breakdown of the payment system if the breakdown of the system was recognizable for the cardholder by a message on the display of the device or otherwise known. The responsibility of the bank for the non-execution or defective execution of the transaction is limited to the principal sum and the loss of interest subject to the provisions of the law governing the terms.
6 & 7
5
II.9.(i)
The bank shall ensure full security of the debit card. The security of the debit card shall be the responsibility of the bank and the losses incurred by any party on account of breach of security or failure of the security mechanism shall be borne by the bank.
4, 6 & 7
6
II.9.(iv)
iv) The cardholder shall bear the loss sustained up to the time of notification to the bank of any loss, theft or copying of the card but only up to a certain limit (of fixed amount or a percentage of the transaction agreed upon in advance between the cardholder and the bank), except where the cardholder acted fraudulently, knowingly or with extreme negligence.
6 & 7
7
II.9.(v)
Each bank shall provide means whereby his customers may at any time of the day or night notify the loss, theft or copying of their payment devices.
5
8
II.9.(vi)
On receipt of notification of the loss, theft or copying of the card, the bank shall take all action open to it to stop any further use of the card.
5

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Saturday, 3 December 2016

05:27

MODE OF PAYMENT SYSTEM WITHOUT CASH

MODE OF PAYMENT SYSTEM WITHOUT CASH


Are you one of the many lakhs of people in the country who have just received their monthly salaries, but don’t have the cash in hand to spend it? The good news is that you can move around with lakhs of rupees of purchasing power in your pocket – the only thing is, it won’t be cash. But, it will be as good, if not better. Credit cards, debit cards, meal cards all carry a certain purchase limit and can be used easily at many shopping centres and stores. With the Modi government demonetising old Rs 500 & Rs 1000 banknotes, more people are being compelled to move towards cashless transactions. So, how does one go cashless? Here are some options for you to consider:
1) Net banking: It allows you to use your banking services from any place across the country. All you need is an internet connection, a username and a password to log in to your net banking website – and voila – ou are ready to use net banking. With the help of net banking, you can check your account balance, statements, you can pay your credit cards bills, electricity bills, do a wi-fi recharge…you can even recharge a mobile or any prepaid connections. It allows you to do third party payment transfer. From net banking, you can also apply for a loan. Purchase of mutual funds, insurance can also be executed through net banking. It is a very secure mode of carrying out multiple transactions. It comes with a range of transaction options such as IMPS, NEFT, RTGS.
2) Credit Card: Suppose you went to a shop and purchased grocery for Rs 5000 and on an agreed future date of payment in good faith, you made the payment on that particular day. Extending the same logic, why should you carry cash when you can simply use a credit card which serves the same purpose? The credit card saves your time as there is no need to go to banks or ATMs. You only need to swipe your card through a machine which shopkeepers and grocery stores normally keep these days. On every purchase made through credit cards, you get reward points which again can be used for the purchase of other products.
There is a misconception about credit cards that you will have to pay hefty charges, but if you are paying your bills within the time frame (due date) then there’s no credit involved. Credit is the grace period given by the banks for paying up the bill. You normally get a credit limit based on your income level, but that also depends on certain factors such as your past credit score, stable job, liabilities against any loan taken and various other payment dues. Some merchant outlets may charge up to 2.5% extra if credit card is used, so do watch out for that.
3) Debit Cards: They are just like credit cards, without the ‘credit’ element. Whenever you are in need of money, this card will provide you cash 24×7 through any ATM machine. There is no need to worry about bank timings, stand in queues for withdrawing cash – leaving out special circumstances like the one we are seeing right now. These are bank account-linked ATM cards, that are mainly used for withdrawing cash. As soon as the cash is taken out from an ATM machine, by swiping your card, the amount gets deducted from your bank account. An instant message is sent to your registered mobile phone providing you the details of cash withdrawal. These are widely accepted cards. Debit cards can be used for online transactions and at merchant outlets.
4) Gift/Forex Cards: These are prepaid cards which have certain cash limit assigned to them. These are readily accepted cards and can be used at any shop and can also be used for online purchase of products. Most of these cards are reloadable but they are reloaded only when the amount is either consumed or gets expired. You can request for this prepaid card through your net banking by going into the card section and selecting the option of ‘request for prepaid cards’ and with few verifications, you will get your card at your doorstep.
5) Digital Wallets: Instead of keeping money in your pocket, purse or physical wallet, you can keep money in e-wallets. These e-wallets are similar to your physical wallets which you keep in your pocket. It is a mobile based application which can be downloaded from any app store and can be accessed through your mobile phone. Transaction or transfer of funds through these wallets can be done across the country between person to person (usage of e-wallet app should be same between the end users). The only thing you need to do is to reload your wallet eacy time by transferring money into it through your bank account. These wallets are highly encrypted, so, there is no need to worry about security. Currently, e-wallets are offered by PayTm, Mobikwik, Freecharge, Oxigen, Reliance Money, etc. Even banks like SBI, HDFC Bank, AXIS, ICICI Bank, etc. have launched their e-wallets app viz a viz Buddy, Payzapp, Lime, Pocket respectively.
6) UPI (Unified Payment Interface): Simply put, it enables you to transfer money from one bank account to another. It is an infrastructure provided by NPCI’s (National payment Corporation of India) to all the public, private & cooperative banks where they can build their own interface and help the common man easily make micropayments with a maximum cap of Rs 1 lakh through various modes like virtual address (a single identifier code), account no with IFSC code, mobile number or adhar number. It will ease the e-commerce payment gateway where we do not have to share account number or any sensitive information between person to person. Moreover, UPI works 24×7 on real-time fund transfer system.
7) E- Coupons: These electronic coupons are offered by various online mega stores. They are very helpful in taking discounts on purchase done through online shopping. We only need to enter the e-code and get the discount automatically. They do not require any printing or clipping. They carry unique identification code which can be accessed through the internet at particular sites. Some of the coupons which are available online are groupons, nearby coupons, shopping site coupons, etc.
8) Physical coupons: These are paper coupons which come in small denominations of Rs 10 to Rs 50 with a validity of 6 months to 18 months. These are used by corporates to reward their employees. The best use of these coupons can be done in buying meals from places such as Pizza Hut, Dominoes, KFC, Big Bazaar, etc. Out of many, two big giants that are providing these coupons are Sodexo and Ticket Restaurants.
9) AEPS (Aadhaar Enabled Payment System): Going ahead, you can use Aadhaar cards as a debit card in various merchant stores. These cards have been already linked to your bank accounts. You will be provided with a finger scanner at the merchant’s store to do your payments. Aadhaar-cum debit cards will allow you to do micro-payments for not more than Rs 4000. However, there are several questions like which bank account will be taken into consideration for making payments.
10) Med Health Cards: These are discount cards specially designed to avail benefit from the healthcare sector. These cards provide various health care savings programs. These cards provide free OPD consultation service. You can use this card and get a health check up done.

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Thursday, 1 December 2016

19:33

More Secure Together This Global Shopping Season

More Secure Together This Global Shopping Season

Consumers, retailers, payment processors work together to reduce fraud and enhance security in this holiday shopping season

Thanksgiving in the United States has already come and gone, and we’ve dived headlong into the heart of shopping season. And the season doesn’t stop at the end of December; the shopping frenzy will continue – globally – through February 14 of next year. Many forecasts from research and retail organizations (see some links below) predict retail sales will rise around three percent when compared to the previous year, but the biggest gains will be made in online and mobile commerce. According to Adobe Systems, Black Friday online retail sales in the US were up 21.6 percent this year, while sales via mobile devices were up 33 percent.

More than other times of the year, fraud and security are on the minds of both consumers and the entities involved with settling the transactions, including retailers, banks and payment processors. Payment data, such as credit card or debit card numbers, can be stolen in large quantities and monetized quickly and profitably. This is primarily why financial and personal data remain a prime target for hackers. While there are existing security best practices and safeguards to protect consumers from fraud, it takes both the consumers and the settlement entities to work together to successfully reduce payment fraud.

Here are some tips for consumers on how to keep your data safe in the era of cyber shopping. Some additional tips for both in-person and online shopping experiences:

For in-person shopping, use your smart payment cards, also known as chip-and-PIN cards. These cards have been proven to reduce counterfeiting. The chip embedded in the card makes the transaction more secure by encrypting information when completing a transaction at a chip-enabled payment terminal. It has been available in most of the rest of the world and is now (finally!) available in the U.S.
When shopping online, look for reputable payment processing partners like PayPal, Authorize.Net, and for SSL certificates like Verisign, or accredited by the Better Business Bureau. Whenever you enter payment information online, there should be a lock symbol by the browser’s URL.
If you are a first-time buyer on an online store and you are not sure whether they have solid security practices, make your purchase as a guest instead of creating an account if there’s an option. This way, your personal and payment data will not be stored.
Another way to assess whether the online store has sound security practices is to see whether it has published security and privacy policies on the website. A reputable online merchant will communicate such policies publicly. It’s a good way to learn more about the company.
Keep good records – always check purchases against credit card or bank statements. Report discrepancies immediately to your bank. If you use credit cards, your liability is limited. In some cases, banks will refund the entire purchase.
As the consumers’ partners-in-anti-crime, the retailers, banks and payment processors are the other side of the coin in fighting fraud. Here are some best practices for IT departments to secure their apps and consumer data against fraud:
  • For retailers, when completing a transaction, use payment terminals from reputable vendors that are secure and support end-to-end (or point-to-point) encryption, including Ingenico, Vantiv and Heartland. End-to-end encryption means payment data is encrypted immediately when you enter your card number, and that the data remains encrypted as it is transmitted to the processing system. Other acceptable data anonymizing methods include masking and tokenization.
  • Don’t keep the data in your payment terminals or on mobile devices that accept credit cards via a dongle, or in any of the apps in your data centers if you can help it. Transmit the payment data directly to the bank or global payment processor to settle the charge. But if you have to store personal or payment data in your IT system, make sure that data is encrypted, masked or tokenized, and that the application is segmented from other applications.
  • For banks and payment processors that have to keep the payment data for settlement purposes, purge the transactions from the database as soon as you no longer need them. Unless the transactions are recurring for subscription services, get rid of payment data after the normal length of time that banks allow for processing chargebacks (in the U.S., generally 18 months). For storage, always make sure the data is anonymized and that the database is separated from other apps that are vulnerable to malware, like web apps.
  • Maintain Payment Card Industry Security Standards Council (PCI-DSS) compliance for starters, but keep updated on all security best practices. Perform constant penetration testing against the system. Bring on board reputable security assessors to check out your systems. Don’t forget to train your employees to observe security practices, as well as ensure physical offices and stores are designed to discourage insider threats.

Only together can consumers and settlement entities reduce fraud and enhance security in a meaningful way. Start now and don’t stop fighting the good fight! Happy shopping!

Source:Citrix
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Monday, 6 June 2016

15:46

ICICI Bank plans to go paperless in green drive

ICICI Bank plans to go paperless in green drive

ICICI Bank plans to go paperless by putting a host of banking services on a digital platform to reduce its carbon footprint as part of its environmental sustainability drive.
"As a responsible bank, ICICI Bank always focused on all the societal stakeholders, including the environment. We have been endeavoring to go paperless by introducing an array of digital banking services which will help us to reduce the usage of paper," ICICI Bank Senior General Manager Saurabh Singh told PTI on the occasion of World Environment Day.
Tab banking, internet and mobile banking and contactless mobile payment solutions are among the efforts towards managing the environment alongside growth, he said.
"We have also aligned and upgraded our internal operations to minimise the usage of paper. We undertake image based processing at our central operations, the internal memos are all digitised; even our income tax proof submission happens electronically," Singh said.
The country's second largest lender in the last few years has focussed largely on reducing its carbon footprint by bringing in more efficient technologies and processes.
"We will continue to leverage on our strengths to build a more sustainable and self-sufficient ecosystem. In this regard, we would aim to go completely paperless as an organisation in our processes", he added.
×
In its goal towards environment conservation, he said ICICI Bank in the last few years has reduced its overall energy consumption by 15 per cent in 2015-16.
"To give you a perspective, this saved energy of 29 million units could power 24,000 urban households or 32,000 rural households for an entire year", Singh said.
Also, 15 of ICICI Bank's large offices and two data centres reduced carbon dioxide emission by 15,500 tonnes in last fiscal as compared with fiscal ended March 2013.
ICICI Bank said it reduced its paper consumption by one-third in 2015-16 compared to 2013-14.
This reduction in paper consumption is equivalent to saving around 13,770 trees. Thus, all the green initiatives of the bank have delivered positive results and will encourage us to push the envelope further, he added.
The official said the bank has consciously made efforts to adopt more efficient and eco-friendly initiatives and a big portion of this is driven by its employees.

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Thursday, 26 May 2016

08:22

SBI-BSNL launch Speedpay: How mobile wallets can change your life

SBI-BSNL launch Speedpay: How mobile wallets can change your life

Remember the time you stood in a long queue in banks, (Mondays and Saturdays being the worst) and spend almost half a day to get your passbook updated or funds transferred to your parents. Soon that became part of lore with the era of internet banking, which made it possible to transact online. With mobile banking using the mobile handset, transferring money at the click of a button anywhere made it even quicker.
Mobile wallets and major players in the genre are bywords for most people in Tier 1 and Tier 2 cities who use them to transact everything from paying their water bills, buying clothes, ordering food, recharging your phone, amongst a host of other needs.
The latest to enter the mobile wallet space is the country's largest bank State Bank of India with BSNL and launch Speedpay. However, BSNL had launched Speedpay card service linked mobile wallet in July 2015. It allows its customers to transfer money, pay for services as well as withdraw cash of up to Rs 1 lakh. SBI has on its part launched its mobile wallet service, Buddy in 13 languages in August 2015. The wallet was launched with Accenture as technology partner and MasterCard as service providers.
What is a mobile wallet?
A mobile wallet is a digital equivalent of a digital wallet. It carries primarily what a consumer would carry in his wallet such as credit and debit cards with an additional card, which is a ID card. For instance, if you want to send money to your relative or friend, you would earlier call up your friend and ask for his account and ISFC details. In mobile banking, you release the payment through your mobile to his/her mobile number. Your friend does not have to know your banking details.
When you go in to a store and buy a product, there is no need to whip out your wallet and use various plastic cards. Just punch the CVV (card verification value) – an anti fraud security feature behind your credit and debit card, and OTP details – a one-time password that is valid for only one login session.
How to use M-wallet?
A consumer has to first download a mobile wallet service provider on his phone through Google Play store or Apple App store. An active internet service is needed to use the app. You can use any of the options such as Facebook, mobile number, email id etc to sign up. After that, upload any amount you want to on the mobile wallet through net banking, debit card or IMPS (Immediate Payment Services) via MMID (Mobile Money Identifier is a 7 digit number issued by a bank against an account linked to a mobile number) . He can use the funds to buy things online or even offline. However, the merchant with whom he/she is dealing with has to have the same mobile wallet service provider.
Mobile wallet is not interoperable – both the sender and receiver must have the same service provider.
India's mobile phone users crossed the one billion mark in 2015. The number of mobile phone users in India is expected to rise to 730.7 million in 2017 the number of mobile phone users in India is expected to rise to 730.7 million.
The current market size in India for mobile wallet (m-wallet) stands at about Rs 350 crore and is expected to rise to Rs 1,210 crore.
SBI-BSNL tie up
The SBI-BSNL partnership though is eliciting mixed reactions from analysts with some seeing the development as a positive step while others wondering aloud on the necessity for it. Some feel that since SBI and BSNL are government entities, they could bring in a degree of `comfort' and `security' for consumers.
Some experts opine that Speedpay is a smaller version of Unified Payment Interface (UPI) loaded on to BSNL. "Why would the SBI do something similar when UPI will be launched in a year or 18 months time,” asked an analyst. The UPI scores over Speedpay as it is bank agnostic unlike Speedpay which requires the consumer to be a SBI account holder to access it or a BSNL consumer.
The UPI is a secure, reliable, mobile-first, interoperable platform. Unlike m-wallet which does not allow for transactions over Rs 10,000, the UPI platform allows for money transfers up to Rs 1 lakh.
"The digital payment market size in India is less than 10 percent against total money movements. When large players like SBI and BSNL that have a huge reach enter the market, it will help expand the market," says Asutosh Upadhyay, Chief Product and Marketing Officer, Udio, a social mobile wallet from Transerv, a digital payments company. With Udio, a consumer can split bills, send and request money and also make group payments.
Sanjay Khan Nagra, senior associate, Khaitan & Co, feels that this tie-up will open up rural and remote markets to the Speedpay service. He reasons that the local grocer in a remote place would now be able to go cashless by asking the consumer to load the money on to Speedpay. "There are areas in India where traditional consumers have no reach to banking system. Just like most of us in the urban areas use a Paytm to pay while using a black and yellow cab, similarly the rural populace can access Speedpay and not worry about, Bhaiyya, paisa kab transfer karoge?”
Customer loyalty is an unheard of currency in mobile wallet usage. If the service provider does not provide incentives, the mobile wallet may remain a mere app among a host of other apps that the consumer has downloaded.

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