In November last year, GoMo news reported on the new mobile transfer system launched in India. Designed to make transferring money via SMS as easy as possible, it was a platform that filled me with real enthusiasm. Six months later, the Interbank Mobile Payment Service (IMPS) has released some results, showing a slow but hopeful performance since launch. We take a look at what the service does, and how it’s been doing.
What is the IMPS?
It’s a platform designed to let consumers transfer small amounts of money from phone to phone, using only SMS – by linking different banks together through a common platform (hence the “Interbank” part of the name”). The whole system is supported by the NPCI – the National Payments Corporation of India, a body created by the Reserve Bank of India for the express purpose of managing retail payments systems, and ensuring that the many different payment systems in India all work together as a single service layer.
It works around Mobile Money Identifiers (MMIDs), which mobile phone owners are issued by their bank. Once you have a mobile phone number and the corresponding seven-digit MMID, you can transfer money to any other phone owner whose bank supports the IMPS. With a single SMS, the money comes straight out of your bank account and goes straight into theirs. There’s also an application for the service, but you don’t need it to either send or receive money. Anyone with an SMS-capable phone can use IMPS.
What’s the story?
At launch, six months ago, there were ten banks on the IMPS. The NCPI reports that this number has now increased to twenty, and another fifteen are in the testing and certification phase. It also reports that there are now ten million people registered to use the IMPS – and while the NCPI itself admits that this is a pretty small number considering there are 350 million potential users, it’s also confident that this number will increase steadily as both banks and consumers come to trust the service.
However, perhaps the most important new announcement is that the IMPS is being expanded to include merchants. Up until now, subscribers could only transfer money from personal accounts to other personal accounts. Now it will allow retailers, charitable organizations, utility services and more to receive payments.
And as a final note to the release, the Reserve Bank is now allowing people to initiate IMPS transactions through the Internet and ATMs.
What we think?
There are some things that this release doesn’t address that I think are pretty important. First is the actual amount of use. Just saying there are 10 million people registered for the service doesn’t tell us much at all. How many of them regularly use the service? How much money has been transferred across the IMPS in total? What’s the average transaction size? That would be the more interesting thing to know, not just the number of MMIDs that have been issued.
However, in general, I think the IMPS is going in a really great direction. The inclusion of merchant payments is an essential part of this service that really should have been there at launch. Transferring money from one account to another is only so much use – but being able to use it for retail and bill payments makes the system far more interesting. It’ll be interesting to see how much user growth the IMPS sees after this. In the next release from the NPCI, I’d love to see the breakdown of how often the service is used for personal transactions compared to merchant transactions. And plugging on-line and ATM initiated transactions into the system is an amazing idea. With 20 banks supporting it; on-line and physical integration; and the new merchant capabilities; the IMPS has suddenly become vastly more useful than it was before.