PayMate India, the mobile-payment solutions company, has partnered with Muthoot Finance Ltd, a gold financing company, to allow customers to send money all over India, even if the sender does not have a bank account. PayMate India will be providing the backend technical expertise for the same.
How this works: To initiate a money transfer, customers need to fill out a form at any Muthoot Finance branch. After verification of the form details, the customer can deposit the money to be transferred with the agent and receives an instant SMS containing a transfer code along with a confirmation of the deposit amount. Money will then be transferred to the bank account of the recipient.
As of now the service is only available in the Mumbai and Kochi branch of Muthoot Finance, which means only these branches would accept sender requests, as of now. However, PayMate claims that it will roll out this service to all of Muthoot Finance’s 4,000 branches across India.
Although the service does make domestic remittances a rather simple process for people who don’t have a bank account, it should be noted that the recipient still needs a bank account, which makes the service counter-intuitive, as usually in the case of domestic remittances, it’s the recipient who is more likely to not have a bank account.
Other domestic remittance service: As far as domestic remittance services go, India Post also offers money remittance services including Money Order, Electronic Money Order, Instant Money Order, and Electronic Clearance Services (ECS). In June 2012, The Economic Times also reported that Western Union, a global player in money transfer services, is actively planning to enter money transfer services in India. With the introduction of national electronic fund transfer (NEFT) it has become easier to transfer money from one bank account to other. Apart from that, there are also services such as FINO.
Other developments: In 2011, Paymate launched the mKCC pilot project along with select number of banks in the Villupuram district in Tamil Nadu. PayMate carried out a pilot project funded by NABARD in Villupuram district, which resulted in 7,000 farmers in that region enrolling for the service.
Last year in April, PayMate had tied up with IFMR Rural Finance, which offers financial services in rural areas through its Kshetriya Gramin Financial Services (KGFS) entities. As a part of the initiative, the company had launched a mobile based person-to-person money transfer service in the Delhi to Uttarakhand corridor, as well as piloted a micro-loan repayments in villages in Ganjam, Orissa.