The National Payment Corporation of India (NPCI) has proposed that mobile phones can be used for non-financial banking transactions such as Account balance enquiry, replacing ATM machines, resulting in reduced costs for Banks, reports The Times of India. NPCI is already in talks with mobile operators to implement mobile banking transactions through USSD (unstructured supplementary service data) messages, which are realtime messages that flash on the subscriber's screen after he dials a designated code. USSD is used by mobile operators to carry out mobile balance and validity requests for prepaid mobile subscribers, as well as for service activation and deactivation requests. According to NPCI, this can reduce the load on ATMs, as around 1.5 million balance enquiry transactions are carried out daily through third party ATMs, for which banks pay Rs 5 to Rs 8 per query, although five monthly queries are offered free to customers. Mobile banking transactions (both financial and non-financial) have so far been rather low in India - and SMS based inquiries and alerts are not new. We wonder why the NCPI is going down the USSD path, particularly since CDMA users will not be able to use USSD. Boost Low IMPS Transactions The total number of transactions on IMPS (Interbank Mobile Payments Service), a service from the NCPI, remained remarkably low at 9,989 in August 2011, which means that less than 7 people in 10,000 with MMIDs are transacting each month. NPCI feels that the major reason for low transactions on its IMPS mobile money transfer service is that…
