Several banking activities today can be carried out at the tap of the keys on your mobile phone. But for the uninitiated, the multiple ways of using the mobile phone for banking purposes can be difficult to decipher.

Is SMS banking synonymous with receiving alerts for transactions?

What is the advantage of using a mobile banking application on your phone over other mobile-based banking services? Is an IMPS transfer different from an NEFT transfer? Here’s a low down on the services , their suitability and the costs involved.

Alerts vs. SMS Banking

You withdraw cash from an ATM, and a second later your phone beeps, informing you of the transaction. You swipe your debit card in a grocery store – there’s that SMS again. These alerts are the simplest of mobile-based services offered by banks.

These alert you immediately in case of a wrong or a fraudulent debit. For savings accounts, these services are offered free of charge. Some banks charge a fee for alerts on current accounts though.

But let’s say you’re at the checkout counter at a store with a pile of clothes, and want to use your debit card but are just not sure of the balance in your account. Enter SMS banking. Here, you reach out to your bank for updates, unlike SMS alerts which the bank sends you.

In SMS banking, by sending pre-defined keywords through SMS to a specific phone number provided by the bank, you can get instant replies to certain queries such as balance enquiry, cheque book or stop cheque request, credit card balance/reward points, and so on.

For example, by messaging ‘stm’ to 5676712, HDFC Bank account holders can request for their account statement. While some banks allow only non-financial transactions through SMS-based services, few also allow services such as mobile or DTH top-ups or recharge.

Another way of reaching your banker through your mobile is by using USSD-based services.

For example, Vodafone, Idea, MTNL, Reliance and Docomo subscribers can simply dial *525# to make use of this service from ICICI Bank. If you find remembering the SMS keywords a headache, USSD would suit you better as it is an interactive menu-based service.

SMS Banking and USSD based services are a step better than receiving the instant alerts alone. These services suit the not-so-tech savvy or those who do not have Internet connectivity on their phones, but would still like to connect with the bank wherever they are. The charges that you will incur here are the SMS/ USSD requisition charges.

Where apps score

For the more tech-savvy, banks offer full-fledged mobile banking services through downloadable applications that can be stored in the mobile phone or through specific WAP sites provided by mobile phone operators. If you have a non-Java phone with GPRS, you can use the WAP-based services.

But for downloading and installing the application directly onto your mobile handset, a Java-enabled phone with GPRS would be required.

While the banks per se don’t charge anything for such services, Internet browsing and downloading charges would be incurred.

Applications score in two areas. It allows instant fund transfers. This, it does through a service called IMPS (Interbank Mobile Payment Service). Under this, you can use your mobile phone to send funds to anyone, based on the receiver’s mobile number and their ‘mobile money’ identification number as provided by their bank. Using the IMPS, up to Rs 50,000 a day can be transferred. An IMPS transfer is instant and is available 24*7.

This is unlike NEFT transfers – transfers made through the Internet, whether you use your mobile or computer to access your bank account - which have restrictions on timings and are processed in batches. A few banks also allow IMPS services through SMS banking. However, the limits could be lower. Charges for the IMPS service are decided by each bank.

Apps also enable booking of flight, train or movie tickets and shopping. For instance, the mshop service from ICICI bank’s imobile application will help you book tickets, recharge DTH or shop and make payments using your savings account.

>vardhini.c@thehindu.co.in

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