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Go slow on mobile wallet

Start small, like viewing account balance, and gradually move to transactions

Tania Kishore Jaleel  |  Mumbai 

Airtel Money’s latest advertisement is hard to miss. For the first time, the virtues of are being conveyed to customers. Banks such as HDFC Bank, ICICI Bank, SBI, Bank of India, and are offering this service.

However, not many know the manner of transacting or the kind of transactions that can be done using mobile phones and the charges involved.

offers two types of accounts — express and power. The power account lets you spend and transfer money to other bank accounts, as well as to power accounts.

You begin by registering yourself. You will have to visit the bank or service provider branch with an identity proof to fill the Know Your Customer (KYC) norms. ID proof, such as original letter of introduction from the bank, driver's licence, employee ID card, PAN card, passport, voters ID, etc, will do.
 

MOBILE TRANSACTIONS: A LOWDOWN
These require you to download an app from the bank’s website
What you are charged
Transactions Charges
Bill payments Rs 10
Travel ticket booking amount  1 per cent of transaction (maximum Rs 50)
Movie ticket booking Free (introductory offer)
Fund transfer to customer Rs 5 up to Rs 500, Rs 10 thereafter 
Fund transfer to a bank account 2 per cent of transaction amount (minimum Rs 10)
Charges applicable only for Banks charge normal internet/SMS charges
Drawbacks of mobile wallet 
  • Security is an issue as softwares can track down passwords
  • Disruption in mobile phone network could interrupt transaction 
  • There could be a risk of virus attack
  • Mobile wallet cannot be used at all merchant outlets
  •  Merchant outlets charge a percentage of the transaction amount as service charge

You do not need a smart phone or GPRS to use the facility. It can work through SMS, too. However, with a smartphone, you could do more complex transactions.

Once you register, you can download the "app" from the bank or service provider's website. The Reserve had recently lifted the cap of Rs 50,000 as the transaction limit and has permitted banks to set their own limits.

To transact, you will have to transfer some money from your account to your wallet. For example, customers will have to transfer Rs 5,000 from their savings or current account to their mobile wallet. customers can recharge their accounts online or at a retail recharge outlet.

Transactions are not just restricted to checking your balance. You can transfer funds not just within the same bank but also across banks. The Interbank Mobile Payment Service (IMPS) makes this possible. "Just like how you register a beneficiary account in your netbanking facility, you will have to register the user to whom you will be transferring the funds. The facility is almost similar to that of netbanking," says Shyamal Saxena, GM-Retail Banking,

Other transactions you could do through your bank's service include getting information on mini-statements, monitoring your term deposits, access your loan and card statements, order cheque books, stop payments on cheques, change your PIN and so on.

Since you can only shop and spend at outlets where the bank or service provider has tie-ups, you can’t use the mobile phone the way you swipe your card!

As for costs, banks do not charge you for transacting through this mode. However, will charge you. For instance, if you send money to an customer, you will be charged Rs 5 for amounts up to Rs 500 and Rs 10 for larger amounts. Also, remember, the merchant outlet will charge you a certain percentage of the transaction value. For example, in the case of Corporation Bank, the merchant outlet will charge you 1.5 per cent of the transaction amount.

You are often advised not to store important passwords and so on, on it. But it is safe, say experts. "Every time you transact, you will need to enter your unique PIN (which you will get at the time of registration)," says Standard Chartered's Saxena.

This PIN does not get stored on your handset, so you do not have to worry about it getting hacked in case you lose your phone. Your bank account and card details are stored in your phone, in an encrypted format.

"There is still a risk of getting your passwords tracked down, using certain applications, risk of virus and so on. The network could also go off and it could interrupt the transaction, wherein you might end up having your account debited without the transaction taking place," says Ankita Somani, research associate, Angel Broking.

And, since this is a relatively new concept, it is advised you start with simple transactions, such as viewing your balance. Anil Rego, certified financial planner, advises users to gradually move to more complex transactions as they become increasingly familiar with "Netbanking is a little bit more convenient and has been around for long. Move to bigger transactions once you understand all the nitty-gritties properly," he says.

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