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Updated: NPCI Extends Interbank Mobile Payments Service To Merchants

Updated below

Interbank Mobile Payments Service (IMPS), the payment platform launched by National Payments Council of India (NPCI) in collaboration with its member banks, has now extended the service to merchant payments, enabling mobile banking customers to make payments to merchants and enterprises through this payment mode.

This follows a six-bank pilot launched by the organization in June 2011, when it had received the approval of the Reserve Bank of India to offer person-to-merchant and merchant-to-merchant transactions. Back then, 21 banks had joined the initiative, but during the course of the year, the number seems to have risen to 50 banks.

Participating Banks: The organization states that seven Update: Eight member banks of NPCI including State Bank of India, Union Bank of India, Canara Bank, ICICI Bank, Kotak Mahindra Bank, HSBC Bank, Standard Chartered Bank, and Yes Bank have already enabled the IMPS merchant payments service and five banks including Axis Bank, Federal Bank, Dombivli Nagari Sahakari Bank, Corporation Bank and Greater Bombay Bank are in the process of getting the service enabled and is expected to offer the service shortly. Eight banks including ING Vysya Bank, HDFC Bank, Citi Bank, IDBI Bank, Andhra Bank, Karur Vysya Bank, Oriental Bank of Commerce and Bank of Baroda are in development phase of introducing the service.

Services Offered: In June 2012, IRCTC had integrated IMPS to its railway ticket booking system and four banks including State Bank of India, Union Bank of India, Canara Bank and Kotak Mahindra Bank had enabled this service, as per an email sent out by the organization. However, the service also included an additional step of one time password (OTP) to be generated by the bank separately for making payments.

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Besides this, NPCI also says that the service has been enabled on various other services like Mobile/DTH recharge, Mutual Funds, Credit Card Bill Payments, Insurance Premium, Online Shopping, Postpaid Mobile Bill Payment, Donations, Electricity Bill Payment, Travel & Ticketing, Gas Bill Payment, Airline ticketing.

In addition, NPCI had also sought for RBI’s approval in April this year, to make the mobile payments services by telecom companies like Airtel Money and m-wallet services offered by banks interconnect, in a bid to make them inter-operable which could possibly lead to more mobile transactions, and give a boost to m-commerce.

User base: In June 2012, IMPS had reported 35.51 million unique customers. It had generated 34,084 transactions, up 8% from 31,553 transactions in May 2012, however the amount transacted had declined massively to Rs 13.16 crore, a 88% dip from Rs 110.44 crore in May 2012. As a result, the average transaction amount had also declined by 88.96% to Rs 386.34 from Rs 3500 in May 2012.

Update: Where the IMPS service will fail (Nikhil adds)

We had stated before, IMPS has an immense potential to transform mobile payments in India like no other payment system since it charges only Rs 0.1 per transaction, and with 50 banks participating in the initiative so far, it can be an universal money transfer and payment service in the country.

However, as long as the IMPS service needs the user to remember his own IMPS number, the merchants IMPS number, and on top of that, have the disastrous OTP (One Time Payment) requirement, it will fail. The RBI and banks seem to be so caught up with preventing fraud that they’re losing money putting together services that users will find difficult to use. Whither usability?

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IMPS Reports 34.94M Mobile Money IDs, 43 Banks; Just 31,553 Transactions In May 2012
April 2012: 34.54M IMPS Mobile Money IDs; 24,922 Transactions
March 2012: 33.87M IMPS Mobile Money IDs; 30,137 Transactions
– February 2012: 33.53M IMPS Mobile Money IDs; 22,997 Transactions
– January 2012: 18.33M IMPS Mobile Money IDs; 19,101 Transactions
NPCI Wants To Make Mobile Payment Platforms Inter-Operable
DoT Allocates USSD Code For NPCI Mobile Payments
– IMPS To Pilot Merchant Transactions; Should Not Increase Rates
– Why Are Banks Not Promoting The IMPS Money Transfer Service?

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