How would it be if you could transfer money from your bank account to someone else’s without knowing the recipient's account details, not even the account number? It would be convenient, to say the least; no writing down long-winded account numbers, Indian Financial System Code (IFSC) and whatnot. Large private sector banks such as Axis Bank Ltd, ICICI Bank Ltd and HDFC Bank Ltd have launched apps and websites through which one can transfer money from her bank account through social media platforms, emails and messages. So, you can send money to anyone with a bank account as long as you know her mobile phone number or email address, or if the person is your friend on Facebook or a follower on Twitter.
Mint takes a look at four such products—PingPay from Axis Bank, Chillr from HDFC Bank, Pockets from ICICI Bank and KayPay from Kotak Mahindra Bank Ltd—to understand how these work.
What’s common between the four products is that they all allow a user to send money without knowing the receiver’s bank details. But they differ in terms of user interface, back-end infrastructure and fund transfer costs.
Ping Pay
This app by Axis Bank allows you to send, ask for and receive money via Twitter, Facebook, WhatsApp, email and SMS. But you need to be the bank’s customer to be able to send money. To receive and to ask, you don’t need to be a customer of the bank. If you ask for money, the other person needs to have an Axis Bank account.
If you want to send money to, say, a WhatsApp contact, first download the app on your mobile phone. Then enter your bank account details and simply send money to any WhatsApp contact. When you send money, the receiver will get a WhatsApp message, which will have a link. The receiver has to click on it to download the PingPay app from Google Play Store. The next step is to enter the details of her bank account where she wants to receive the money. The transfer happens within minutes as the app works on National Payments Corporation of India’s Immediate Payment Service (IMPS) platform.
The process is the same if you send money via email or a social media platform. As of now, the bank is offering the service free of cost, but one can expect a charge equivalent to any IMPS transaction (Rs.5 plus service tax) in the future. If volumes go up, the bank may pass on the cost.
Though the app is on the IMPS platform, its transfer limit is Rs.50,000 a day (versus up to Rs.2 lakh per transaction on IMPS).
Chillr
HDFC Bank’s Chillr app allows you to send money to any mobile phone number in your phone contact list. To send money, you need to be the bank’s customer; the recipient may or may not be.
How does it work? “It is a three-step process,” said Nitin Chugh, head-digital banking, HDFC Bank. To begin with, you will have to generate what’s called mobile money identifier (MMID), either through mobile banking or Netbanking. With mobile banking, you need to login, go to “third-party funds transfer” option and then generate your MMID. You will also need to select a bank account number and then confirm it. With Netbanking, after logging in, click on “requests” option to generate MMID. Then you will have to call a toll-free number to generate an MPIN (mobile personal identification number). Once you get this, change it to a four-digit MPIN of your choice. Next, download the Chillr app from Google Play Store, Apple app store or Windows store.
Apart from having the app, your account will also need to be IMPS-registered. To send money, select the intended recipient's number from the phone contact list, enter the amount and an optional remark, and authorize the transfer using the MPIN. The recipient will get a link, which she needs to download to receive money.
The registration process takes 3-4 hours. Sending money costs Rs.5 plus service tax as transaction cost. The maximum amount per transaction per day is Rs.5,000 and the maximum number of transactions in 10.
Pockets
ICICI Bank has two versions of the product through which you can send money. In one version, the app is on Facebook. A bank customer can send money to anyone on her Facebook friend list. The other version is an e-wallet. It allows you to send money through Facebook, email and mobile phone number.
How does the Pockets app work? The digital banking app is a wallet that can be downloaded on a smartphone. If you have an ICICI Bank account, you can register with your account details. Non-ICICI Bank customers will have to enter personal details such as name and mobile phone number for registration. After authentication, you need to load money—the bank’s customer can load from linked savings account; others will have to tap on “other modes” option.
To send money, you need to create a coupon, which the recipient can redeem within three days from a particular link (www.icicibank.com/pockets). If not redeemed, the money goes back to the sender. To receive money, the coupon can be accessed using a passcode authentication, which the sender has to give to the beneficiary.
Unlike Ping Pay and Chillr, Pockets is on the National Electronic Funds Transfer (NEFT) platform. The maximum transaction limit is Rs.10,000 per month. As of now, the service is free, but if it becomes chargeable, the cost is likely to be in the range of Rs.2.5-5 plus service tax, depending on the amount.
KayPay
Kotak Mahindra Bank’s KayPay is not an app but a money transfer website that can be used by customers of various banks (30 banks to receive, and 28 to send). Though it is not an app, as a website it allows you to transfer funds through Facebook, Google+ and email address.
How does it work? To start, you will have to register your bank account on Kaypay.com along with details such as mobile phone number and email address. To transfer money, select a person on your Facebook friend list, Google+ and email list. Then select the account number from where you want to send money and the amount you want to send. You will get a one-time password (OTP) to confirm the transaction. You can generate the OTP via your banking app or by sending an SMS. You can send money even to a person who is not registered on Kaypay.
The recipient will get a message informing them about the transfer. Kaypay can be used by those who have a savings account with a bank that enables IMPS person-to-merchant pull service. As of now, 30 banks allow fund transfer via Kaypay.
Using KayPay site is free of cost. But since it runs on the IMPS platform, if the bank decides to charge a fee, the cost could be around Rs.5 plus service tax. The maximum amount that you can send per day is Rs.2,500 and with a monthly limit of Rs.25,000.
Are account number, IFSC old economy?
The three apps and one website mentioned above do not require recipient's account details. Bankers believe that the younger generation wants ease of transaction, without having to remember long account numbers and IFSC.
“Technology is changing rapidly. What was not possible two years ago is possible now. As adoption of social media has increased, we, too, have moved from mere engagement to transaction. Mobile banking is also picking up in a big way,” said Rajiv Anand, group executive and head (retail banking), Axis Bank.
According to the Reserve Bank of India, value of mobile banking transactions increased to Rs.16,914 crore in March 2015 from Rs.3,407 crore in March 2014. During the same period, volumes rose to 19.7 million from 10.7 million.
But how secure are these transactions? “A transaction on social media is as secure as one on a banking platform. Only the front-end looks different; at the back-end, it is the bank’s server that is used,” said Abonty Banerjee, general manager and head of digital channels, ICICI Bank.
The focus on social media platform is not just for visibility or marketing, but also to build up the current account savings account (CASA) base. “Two years ago, we were not comfortable with money transfers on social media. But now technology has evolved. And, of course, this is also an indirect way to get new customers and increase CASA,” said Chugh.
For most banks, this is a way to increase customer base, one way or the other. “We currently acquire customers through the traditional route of getting the salary account. In future, we believe people will choose a bank not necessarily based on how close the branch is but on how good the bank’s digital capabilities are. We have noticed higher stickiness from customers who use and download the mobile banking app,” said Anand.
Mint Money take
In the next few months, one can expect more banks to launch different or similar versions of these products, targeted at the age group of 21-25 years. But apps and websites are not the only way of transacting on social media platforms. Banks have also been using the concept of hashtag banking, where you can hashtag the fund transfer via Twitter. Bankers believe that they need to be wherever the customer is, and these platforms allow banks to engage with the customer.
“The younger generation is more willing to engage with banks on social media,” said Anand.
Using social media and instant messaging platform also means that banks are able to service customers of other banks, who may change loyalties.
There is currently a race on in the banking industry to come up with innovative products. However, small banks are staying away for the time being and plan to enter at a later stage, when they have settled upon a model that will work for them.
Apart from that, there are concerns about security. Apps and mobile banking do not have foolproof security (see http://mintne.ws/1RrM1O3). And since the services are social media based, using them means the bank will be aware of your activities, since Internet, social media and mobile banking generate data which can be easily accessed.
But if convenience is what you are looking for and are comfortable transacting on social media or any other such platforms, these products are for you. When you try out these apps, be sure to not divulge passwords and other key details to anyone.
