SBI Mobile Wallet for Cashless Payment Coming Soon

State Bank of India’s (SBI) will soon introduce a mobile banking service, “mobile wallet“. It will be a stored-value account based on a customer handset. SBI’s mobile wallet is expected to become operational either by the end of September this year.

Customers would not be levied any charges by the bank for opening a mobile wallet and for mobile-to-mobile transactions. High-end mobile users can use the service through an application provided by the bank, while low-end mobile users can use SMS, reports moneylife.

In mobile banking, the consumer sends a payment request via a short messaging service (SMS) text message or Unstructured Supplementary Service Data (USSD) to a short code and a charge is applied to the customer’s phone bill or, in the proposed SBI scheme, a mobile wallet. The vendor is informed of the payment success and can then release the goods or service.

The SBI application being used by high-end mobile users will allow customers to withdraw cash up to Rs 5,000. The whole transaction process will be secure as the data will go through end-to-end encryption. However, an SMS-based transaction will not allow any withdrawals, but will allow the consumer to use a mobile only for small payments.

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It is expected that the charges for withdrawals would be 1% of the cash withdrawn from an account. Currently, the Reserve Bank of India (RBI) allows only Rs 5,000 to be withdrawn through such mobile transactions. it is reported that SBI has already reached an agreement with various service providers like Vodafone Essar, Bharti Airtel, Aircel, Tata Docomo and Idea, for providing mobile wallet services.

Recently, SBI allowed its customers who had mobiles not equipped with Java or GPRS to access its application State Bank freedoM – making it available from all application bases, over Wireless Application Protocol (WAP), and over USSD. State Bank freedoM service offers transfer of funds, viewing of the balance and mini-statements of the customers’ accounts, payment of bills, request for cheque book, recharge of prepaid mobile connections, viewing of demat account details, top-up of direct-to-home (DTH) satellite TV services, and m-commerce transactions. [source]