You can pay your vegetable vendor, rickshaw driver via mobile phone

If credit cards minimised the hassle of carrying excessive cash, the National Payment Corporation of India (NPCI) has ensured monetary transactions become even simpler.

The NPCI on Monday launched its Interbank Mobile Payment Service (IMPS), which can be used for activities like buying vegetables and newspapers. One can also pay auto and taxi fare using the service.

Using the facility is simple. All one needs is the mobile number of the vendor apart from the seven-digit mobile money identifier (MMID). The MMID is a unique number assigned by the bank for each account linked to any cellphone number. Money can be transferred to the vendor’s account within seconds and the customer will get a confirmation immediately after.

The prescribed limits are Rs50,000 per day for end-to-end encrypted transactions and Rs1,000 per day for unencrypted transactions. At present, the State Bank of India, ICICI Bank, HDFC Bank, Axis Bank, Union Bank of India, Yes Bank and Bank of India are offering the IMPS facility. Other banks may follow suit.

“Mobile payment services have the potential to change the retail payment landscape in India provided all the stakeholders get it right,” said Shyamala Gopinath, deputy governor, Reserve Bank of India. “Mobile money has the potential to facilitate inclusive growth.”

The NPCI has asked banks not to levy any charges to the customers till March 2011 for the service. The NPCI too is not charging banks for offering the IMPS facility to people.

After March 2011, the NPCI will charge banks 25 paise per transaction. At present, customers will only have to pay the nominal charge levied by the telecom service provider for using GPRS to facilitate the transaction.