A group of friends are having dinner at an upmarket restaurant. During which, they post pictures of one another, the food and the restaurant's decor on their respective Facebook timelines, using smartphones. However, when it comes to splitting the bill, nobody has enough cash. So, one of them volunteers to pay with a credit card and the others promise to pay their share soon.
What if they could pay by using Facebook? The money would be transferred to their friend's account instantly. No time would be lost in adding the friend as a beneficiary or asking for details such as bank account number and branch IFSC code, etc.
A few months earlier, Kotak Mahindra Bank started Kaypay and ICICI Bank launched Pockets. These are money transfer services that can be accessed through Facebook. The technology used is Immediate Payment Service (IMPS), a 24x7 interbank electronic fund transfer service provided by National Payments Corporation of India (NPCI).
Fund transfer through Facebook is meant for tech-savvy customers, who have access to the internet round the clock, either through smartphones, tablets or laptops. The ATM-to-ATM fund transfer offered by some other banks also uses the same IMPS technology but caters to those who might not have access to the internet all the time. Here, you can transfer money from one bank account to another through the ATM. All you need is your debit card and PIN number.
Let us look at how these fund transfer services work:
Transfer through Facebook
Kotak Mahindra Bank's Kaypay was launched four months earlier. To use this, one has to register on the kaypay.com website, through your Facebook account. Register your account number by filling in details like your bank's name (choose from the options provided in the drop-down), account number, email address and mobile number.
Once you register, you will get the Mobile Money Identifier (MMID) from your bank on your registered mobile number, which you have to enter, too. MMID is a seven-digit code issued by the bank to customers who have registered for mobile banking to avail of the IMPS service. To get the MMID, you can send an SMS to the bank. If you are a Kotak customer, you don't need to provide the MMID. Instead, give the customer relationship number.
Once you provide the MMID, your bank account is linked to Kaypay and Facebook. Now select a friend from your Facebook list, enter the amount you want to send, select your bank account, generate and enter a One Time Password (OTP) and send the money. The OTP will expire within one hour. Your friend will be notified via a Facebook alert. If your friend is already registered with Kaypay, he/she will receive the money instantly. Otherwise, he/she has two days to register. If not, the money will come back to your account.
A sender can send up to Rs 2,500 daily and up to Rs 25,000 a month through Kaypay. A receiver can get up to Rs 25,000 on a daily and monthly basis.
"We are looking to replace cash payment and, hence, the cap on daily transaction is a small one. Going ahead, we might extend it for other kinds of payments. The whole idea is to make banking more convenient for customers who are on the go and want everything available at a click," says Deepak Sharma, executive vice-president, digital initiatives, Kotak Mahindra Bank.
Using Kaypay to transfer money is secure, says Sharma, as it is owned by the bank. "Facebook is allowed only as a first-factor authentication. It only allows you to connect with friends," he points out.
Your driver urgently wants to send money to his family in the village. Instead of wasting time going to the branch, he can go to the nearest ATM and send it by keying in the beneficiary's debit card number. The money is transferred to the beneficiary instantly. In this case, the technology is the National Financial Switch offered by NPCI. The current limit is Rs 5,000 a day and Rs 25,000 a month.
Currently, only five banks offer this service and another six to seven are in the testing stage says A P Hota, managing director of NPCI, which also provides the IMPS technology.
Another way to transfer funds from ATM to ATM is by using IMPS. In this case, you will need the beneficiary's mobile and MMID numbers. Both sender and receiver will get alerts on their mobile number once the transaction is complete. In this case, the limit is Rs 50,000, the limit allowed for mobile banking.
According to an official with Union Bank of India, one of the banks that offer fund transfer through ATMs, this feature is useful in places like a college campus, or a defence cantonment, which might be far away from a bank branch. But not all ATMs might offer this facility, as it is an expensive feature to include in the machine, he adds.
The transactions are as secure as any other ATM transaction. But one needs to worry about the debit card and PIN getting compromised, says Hota.
In the case of debit card to debit card transfer, customers should ensure they key in the correct 19-digit debit card number. Else, the funds will get transferred to a wrong account and getting these back can be a hassle.
The advantage of fund transfer using the IMPS technology is that you don't need to know the beneficiary's account number, branch IFSC code or wait for up to a day to add the receiver as beneficiary. This is the procedure required for transferring funds online through your bank account. Besides, unlike NEFT and RTGS, which can take up to 24 hours and are not available during bank holidays, fund transfer is immediate. It is also free; in the case of NEFT and RTGS, that is an online transfer using net banking, there are charges. Charges for NEFT transfer are Rs 2.5 for up to Rs 10,000, Rs 5 for Rs 10,000-Rs 1 lakh, Rs 15 for Rs 1-2 lakh and Rs 20 for more than Rs 2 lakh. IMPS transactions are cheaper than NEFT and RTGS due to lower costs for banks. Currently, most banks offer it free of charge.
"Banks have to make changes in their Core Banking and ATMs to offer IMPS. Today, only a couple offer IMPS at a branch, while some offer it at ATMs and most offer it through mobiles," says Hota.
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