The Mobile Money transfer service, run by BSNL and India Post, which was on pilot since its introduction in July 2012, has been officially launched in all regions where pilots were going on. In July 2012, the Department of Post had partnered with the state-run BSNL to launch the pilot run of the mobile money transfer service in Punjab, Bihar, Delhi and Kerala Circles. BSNL will handle the technology backend for DoP and won’t be a banking correspondent. Since BSNL is only developing the software for the service, users need not be BSNL subscribers to use the service.
Telecom Minister Kapil Sibal has said that the Department of Post, and telecom operator BSNL should waive-off fees charged on money transfers by people in the below poverty line (BPL) category using the newly launched Mobile Money transfer,
How to use: To use the service, senders would need to visit the post offices in the region where the service is available, deposit the amount and give the receiver’s details. After this, they would get a 16 digit transfer code on his mobile phone, which they would need to send to the recipient via SMS. The recipient can claim the money at a nearby post office, by showing the transaction code and verifying his identity. Receipent also needs to withdraw the money within 7 days of transaction. It’s not clear as of yet, whether one can send money even to locations that currently do not support this service, we will update the post once we get clarification on that. The Department of Post had previously said that it intended to connect all 1,55,000 post offices, across the country.
Charges: While telecom minister, Kapil Sibal, has urged both the departments to not charge a fee for transfer of money for the BPL category, the fee has not been waived off yet. So anyone using this service, in BPL category or otherwise, will be charged Rs 45 for sending money in the range of Rs 1000-Rs 1500, Rs 79 for funds ranging between Rs 1501-Rs 5000 and Rs 112 for money transfer in the range of Rs 5001- Rs 10,000, as reported by Moneycontrol.
Although Telecom Secretary R Chandrashekar said that the objective of the service is to lower the cost of transaction to enable transaction of even very small amounts, the mobile money transfer service is essentially charging more fee for smaller amount. For example, the charge on transferring Rs 1000 using the service is 4.5%, 3% on Rs 1500, 1.58% for Rs 5000 and 1.19% for Rs 10000. However, the charges are still lower than using the remittance service offered by the Department of Posts. As we had mentioned earlier, this is essentially an extension of India Post’s Instant Money Order service, which charges 5 percent of the amount for every transaction.
Other Remittance services:
Recently, Vodafone India had launched its mobile money transfer and payment service ‘M-Pesa’ in India. The telco has signed a strategic alliance with ICICI Bank to extend the service to the country. PayMate India, the mobile-payment solutions company, had 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.
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.