MOBILE BIZ Pay at kirana stores with your phone

Mumbai: Micro transactions for payments such as local taxi fares and kirana store purchases are set to go cashless with the National Payment Corporation of India on Monday extending the Interbank Mobile Payment Service (IMPS) for merchants. 

    The likelihood of mobile payments picking up is high because unlike credit and debit cards, the cost of each transaction is very low at 25 paise, making it feasible for banks to offer it for payments as low as a few rupees. Although mobile payment services are already available, IMPS until now allowed only person-to-person transfers. As a result, although 39 million account holders in 50 banks are registered for mobile banking, transactions have been very low. 
    "There are around 10 million kirana stores, but the total number of point of sales terminals in India is less than seven lakhs. IMPS will facilitate micropayments over the counter electronically," said AP Hota, MD & CEO, NPCI. Of the 50 banks, seven including SBI, ICICI Bank and Standard 
Chartered have enabled IMPS merchant payments, another five are getting it enabled and the rest are expected to join in due course. 
    IMPS works in several ways. Payments of up to Rs 5,000 a day can be made through a basic handset which facilitates SMS. Higher value payments can be done using smartphones through a downloaded application. The IMPS mobile ID can be used for making online payments just as one would use a credit card or netbanking. It can also be used for payments through websites optimized for mobile phones or through interactive voice response systems (IVRS). 
    Merchants such as the Indian Railways' online booking portal IRCTC, DTH providers, insurance companies and other utilities have enabled payments through IMPS. 
    But the biggest impact would probably be in overthe-counter payments. At a time when the shortage of small coins is resulting in merchants choosing to forego small change or repaying in kind, a natural demand is likely to emerge. 
    The key impediment to IMPS is lack of awareness. Since a transaction involves multiple numbers, including the MMID number and mobile number to be keyed in, it is also a bit cumbersome. Unlike online banking and ATMs, which have been actively championed by banks to reduce traffic at their branches, IMPS does not have that kind of financial incentive for banks. 
    According to Hota, this is a process of evolution. NPCI is planning to introduce mobile payments on the USSD (Unstructured Supplementary Service Data), the service through which prepaid mobile users check their balance. USSD transactions allow live communication between the user and the server. What this means is that even basic phone users will transact real time without the risk of SMS messages being held up in online traffic.