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Keen on mobile banking? Here's how it works

Keen on mobile banking? Here's how it works

Phones are emerging as a medium for money transfer. Learn how to transact at the push of a key.

Do you load your mobile phone with money before going on long vacations? If not, this may delay payment of phone and electricity bills, even insurance premiums, something that can cost you financially.

You can now use your mobile to store cash and use it to pay bills, transfer cash and even shop at merchant outlets.

Airtel Money, Nokia Money and IndusInd Cash-in-Mobile are among the services that facilitate transfer of money from one mobile to another, payment of utility bills and even shopping at merchant outlets. IndusInd Cash-in Mobile even allows the bank's customers to withdraw cash from ATMs without the card.

Let's see how you can use these services to make your life easy.

The first step is registration with the service provider, mobile manufacturer or bank depending on whose service you want.

This involves visiting an agent of the service provider with your identity and address proofs. The list of agents is available on websites of service providers.

Airtel Money offers two accounts-Express and Power. For Express, which is for bill payment, cash loading and spending, you can register by dialing a number and giving the basic information. The daily transaction limit is Rs 10,000.

Registration for Power is possible only through an agent. For this, you have to furnish some documents. You can send money to an Airtel customer or a bank account only if you have the Power account. The daily transaction limit in the Power account is Rs 50,000.

Convenience at a Price: Fees charged for different facilities by mobile payment service providers.
You can register for IndusInd Cash-in-Mobile service by sending an SMS to the bank's customer care department or visiting select ATMs or branches. Since the service, sending cash, is only for IndusInd customers, there is no need for documentation.

Nokia Money has tied up with Union Bank of India and Yes Bank. The banks' agents do the paperwork. Registration is followed by activation of the service. You get a password for using the service and a personal identification number, or PIN, for confirming each transaction.

There are two ways to use these services-application (customer can download the application after registration) and SMS/voice.

"A technology-savvy consumer will use an application to pay bills or buy a mobile ticket and pay for the transaction in an intuitive way. A number literate person may prefer IVR (interactive voice response) or menu-driven means," says Srinivas Nidugondi, head, mobile financial solutions, Comviva, a provider of mobile solutions.

You can load cash at agents' outlets or the service provider's website. The website will take you to your online banking account for that.

You can withdraw money from the outlets. For this, you have to enter the agent code, the PIN and the amount. You will receive an SMS with a transaction ID. If the amount to be withdrawn is more than a limit, the service provider will send a one-time password to your mobile. The money will be transferred from your account to the agent's account. The agent will verify the details and give you the cash.

In IndusInd Cash-in-Mobile, a customer can initiate a transaction from either select ATMs or the IndusMobile application. He has to enter the mobile number of the receiver, the amount and the PIN. The beneficiary will receive an SMS from IndusInd Bank with a PIN. He/she can withdraw money by entering the PINs of both the remitter and the beneficiary at any IndusInd Bank ATM. At present, Airtel Money does not offer cash withdrawal.

You can also send money from your mobile to another mobile or a bank account. In Nokia Money, the option is mentioned in the application menu. You have to click on the option, enter the beneficiary's number, the amount you want to transfer and your mobile payment PIN.

Airtel Money allows sending of money from mobile to another mobile and a bank account. You enter the receiver's mobile number/bank account number (and other details such as IFSC code), the amount you want to transfer and your mobile payment PIN.

Paying utility bills and charging pre-paid mobile connections were never so easy.

All you have to do is add a biller in your mobile handset from the approved list on the service provider's website, choose the biller from the list and enter the amount you want to pay and the PIN.

Charging pre-paid mobile connections is even easier. All you have to do is select the number and enter the amount. The amount will be deducted from your mobile money account.

You can also use your mobile as a credit/debit card for payments at different merchant outlets. You can shop at these outlets if they are part of the service provider's network.

"Airtel Money has merchant partnerships with over 1,800 brands across the country, including utility providers, insurance companies, mutual funds and local chemist and grocery stores," says Sriram Jagannathan, CEO, Airtel M Commerce Services.

To be popular, mobile money has to be secure. The companies do this by creating a two-layer security system. First, you have to key in a password to enter the mobile money application and then a PIN to complete the transaction.

In some cases, if the amount to be withdrawn is bigger than a certain limit, a one-time password is sent to the customer's mobile for another layer of confirmation.

In IndusInd Cash-in-Mobile, which allows sending of money from your mobile to others, the beneficiary will have to enter two PINs, one sent to him and the other to the account holder, to withdraw money from the ATM.

"Through our Cash-in-Mobile service, the card has been replaced by your mobile and the ATM card PIN by two PINs generated simultaneously to make the transaction secure," says Ritesh Saxena, head, personal account and direct banking, IndusInd Bank.

All a customer needs to do is not divulge his mobile money password and PIN to anyone.

"With implementation of two factor authentication principles, mobile payment services are as secure as, if not more, than other payment methods such as credit/debit cards and ATMs," says Probir Roy co-founder and managing director, Paymate, a wireless transaction payment provider.