Times of India: December, 2016
Mumbai: Starting next month, anyone with a mobile will be able to transfer funds by merely using the mobile number of the recipient. The National Payments Corporation of India (NPCI) has integrated the *99# messaging-based mobile banking service with its Unified Payments Interface (UPI), allowing transfer of money with minimum details.
Currently, feature phones are not used for everyday payments despite there being a platform that allows use of USSD (Unstructured Supplementary Service Data) messaging for the purpose. USSD is the messaging platform that prepaid customers use to check their talktime balance. The problem in using it for banking is that it requires inputs of several dozen characters such as 16 digit account number, 11 digit IFSC code, recipient's name and seven digit Mobile Money Identification Number (MMID).
The UPI, which was launched a few months earlier, aimed to address this problem by linking the account identifiers (A/c number, IFSC code, name) to an 'alias' which includes mobile number and email. However, the limitation was that the service was available only on banking applications, which needed smartphones with internet connections. Now, with NPCI bringing UPI to feature phones, someone with Rs 1000 handset can reap the benefits of instant payments. This 'optimised USSD' will be launched on January 30 with a new brand name by the PM.
"The only condition is that the bank should have joined the UPI platform. With this, even if the customer holds a basic feature phone, he can still avail the benefits that were hitherto available only for those with smartphones," said AP Hota, MD & CEO, NPCI. If the account holder keys in the recipient's mobile number, the UPI platform will retrieve the recipient's name from its server, helping the sender authenticate the number.
"The messaging can be done in English or Hindi. The customer will be given a choice when he first connects and subsequent messages will appear in the preferred language," said Hota. Because of the cumbersome procedure involved in sending money, the USSD platform was used largely for balance enquiry. The non-financial transactions were around 1.5 lakh before November 8 but rose to six lakh transactions post-demonetisation. However, only a few thousand account holders used it every day for sending money. As compared to this, UPI, despite a smaller user base, has seen its daily transactions increase eight-fold from around 10,000 in early November to 80,000 a day.
According to Hota, electronic transactions are continuing to grow even after money has started flowing out of banks. "We are seeing around 13 lakh unique users doing 21 lakh transactions a day up from four lakh transactions a day," said Hota.